35 Chip Stocks Powering AI Boom

1. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 179   

NVIDIA Corporation (NASDAQ:NVDA) operates as a visual computing firm. Latest reports reveal that AI startup CoreWeave is considering a share sale ahead of an expected IPO. The startup is based in New Jersey and provides cloud access to AI GPUs for training large language models, inference and high-performance computing applications. Per reports, the startup, backed by companies like NVIDIA, will allow employees to sell shares worth $500 million, putting the valuation of the firm at around $23 billion. Last year, the startup was valued at around $7 billion. In May this year, it was valued at $19 billion.

NVIDIA Corporation (NASDAQ:NVDA) is the top sector pick of Bank of America. The advisory has a Buy rating on the stock with a price target of $165. In a recent investor note, the investment advisor acknowledged that the firm faced several near-term headwinds that could suppress the stock, including fundamental ones like the Blackwell delay and gross margin pressure. However, analysts at Bank of America underlined that these headwinds had created an enhanced buying opportunity with the stock trading within the lowest quartile of valuation in the past five years.

While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA Corporation (NASDAQ:NVDA) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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