2. NVIDIA Corporation (NASDAQ:NVDA)
YTD Gains as of April 23: 91.73%
Number of Hedge Fund Holders: 186
With YTD gains of 91.73% as of April 23, NVIDIA Corporation (NASDAQ:NVDA) ranks second on our list of the most unstoppable AI stocks to buy. The company is home to an Advanced AI Platform for Enterprises that is capable of managing and deploying AI applications and workflows. The company also produces hardware to power AI applications.
At the close of Q1 2024, 186 hedge funds were eager on NVIDIA Corporation (NASDAQ:NVDA) and held stakes worth $48.3 billion in the company. As of March 31, Citadel Investment Group was the leading investor in the company and held a position worth $18.74 billion.
On May 20, Barclays maintained an Overweight rating on NVIDIA Corporation (NASDAQ:NVDA) and increased the price target to $1,100 from $850. The stock has Buy-equivalent ratings as per the 40 out of 42 Wall Street analysts that have covered it over the past three months. As of May 20, the company has an average price target of $1,057.76 and a high forecast of $1,400. As of May 22, NVIDIA Corporation’s (NASDAQ:NVDA) average price target represents an upside of 10.08% from its current price of $953.86.
Patient Capital Management’s Patient Capital Opportunity Equity Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2024 investor letter:
“This quarter we entered two new positions, while exiting four positions. Our first new position was NVIDIA Corporation (NASDAQ:NVDA), which we bought early in the quarter. Nvidia is the market leader in designing and selling Graphics Processing Units (GPU), which has recently benefited from the insatiable demand of artificial intelligence (AI) models. The company currently captures 92% market share of data center GPUs and grew revenue, earnings and FCF an astounding 126%, 392%, and 610%, respectively, over the last year. While much of the focus is on Nvidia’s market cap reaching $2.3T, up 230% over the last year, the company’s valuation has actually come down over that period. As of 3/31/23, consensus was valuing the company at 61x forward EPS. This compares to today, where the company is being valued at 37x. While yes, we have never seen a company expand their market cap by so much so quickly, we have also never seen a company grow their fundamental earnings and cash generation so quickly (and which is actually expanding faster than valuation). While competitors are working to enter the GPU space, Nvidia has created a moat around their GPUs with their CUDA software offering. While we do expect the large cloud players to continue to move into the market, we think NVDA can continue to demand top market share. With leading edge technology, an increasing innovation cycle and strong cash generation, the company is well positioned for the increased adoption of accelerated computing and artificial intelligence (AI).
Nvidia Corp. (NVDA) was a top performer in the quarter gaining 82.5% in the period. While the company has had an impressive run, gaining 242% over the last year, the valuation has been supported by the impressive growth in Revenue (126%), EPS (392%) and free cash flow (610%) over the last year. The company has solidified its position in the GPU space supported by its proprietary software CUDA. While we expect competition to increase, we think NVDA can continue to maintain top market share. With leading edge technology, an increasing innovation cycle and strong cash generation, the company is well positioned for the increased adoption of artificial intelligence (AI).”
