7 Best Semiconductor Stocks to Buy Now

1) NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 193

NVIDIA Corporation (NASDAQ:NVDA) is one of the leading players in the semiconductor business, with expertise in designing and manufacturing advanced graphic processing units (GPUs) and related technologies. The semiconductor industry’s growth is being driven by the global adoption of AI and ML, with the company’s GPUs, such as A100 and H100, critical for AI model training and inference. With the broader industry scaling to meet AI demand, NVIDIA Corporation (NASDAQ:NVDA) is expected to benefit from supplying cutting-edge hardware and software.

Furthermore, the expansion of data centers and analysis needs more powerful and efficient semiconductors. Thus, NVIDIA Corporation (NASDAQ:NVDA)’s leadership in data center GPUs places it well to capture this increasing demand. The company continues to make strides in the AI and semiconductor sectors. It launched new generative AI models and blueprints to further enhance its Omniverse platform, targeting advancing robotics, AVs (autonomous vehicles), and vision AI applications.

Robert W. Baird upped its target price on the shares of NVIDIA Corporation (NASDAQ:NVDA) from $150.00 to $190.00, giving an “Outperform” rating on 21^st November. Infuse Asset Management, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“We do still own some NVIDIA Corporation (NASDAQ:NVDA) as the forward multiple isn’t egregious and it powers over 90% of AI workloads. This company is only becoming increasingly important though the hyperscalers are actively trying to save money through their own ASIC programs. The moat CUDA provides has been underestimated time and time again. While I don’t think Nvidia has quite the upside as some of the other companies in the portfolio, it has a product that the best companies in the world literally can’t get enough of.”

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

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.