1. NVIDIA Corp. (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
5-Year Revenue CAGR: 62.43%
Upside Potential as of January 15: 30.72%
NVIDIA Corp. (NASDAQ:NVDA) is a technology company that designs and manufactures GPUs for gaming and professional markets. It also develops AI platforms, high-performance computing solutions, and self-driving car technologies to power industries like gaming, data centers, and automotive.
Bank of America maintained its $190 price target for the company recently, suggesting a 27% upside potential. This optimism is driven by the release of Blackwell GPUs, which have already secured 12 months of orders. At CES 2025, the company unveiled Project DIGITS, a personal AI supercomputer powered by the new GB10 Grace Blackwell Superchip. This compact system delivers petaflop-level AI performance while operating on standard household electricity. Project DIGITS is designed to empower researchers, data scientists, and students to develop and run large AI models locally. With 128GB of memory and up to 4TB of storage, the system is well-equipped to handle demanding AI workloads.
In Q3 2024, NVIDIA Corp. (NASDAQ:NVDA) achieved record revenue of $35.1 billion, a 94% year-over-year surge. This was driven by a 112% increase in Data Center revenue to $30.8 billion. GPU revenue has demonstrated robust growth, surging 67% annually over the past three years. This performance is fueled by the demand for computing power necessitated by advancements in AI and ML.
Manole Capital Management noted that NVIDIA Corporation (NASDAQ:NVDA) more than tripled in value over the past year, due to strong AI-related demand and continued revenue growth that exceeds market expectations. Here’s what it said in its Q3 2024 investor letter:
“As of this publication, Nvidia is up roughly 150% year-to-date. NVIDIA Corporation (NASDAQ:NVDA) was the largest gainer in the S&P 500 last year and has more than tripled in value over the last year. It hit an eye-opening market capitalization of $3 trillion in June, less than four months after it eclipsed the $2 trillion mark. Enthusiasm for everything AI-related, especially for the primary chip maker whose products are essential to powering AI technology, continues to fuel the market. Last quarter, and for the fifth consecutive quarter, Nvidia reported sales and profits that blew past Wall Street expectations. The stock rose +37% in the second quarter alone.”
As we acknowledge the growth potential of NVIDIA Corp. (NASDAQ:NVDA), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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