2. NVIDIA Corporation (NYSE:NVDA)
Number of Hedge Fund Investors: 186
NVIDIA Corporation (NYSE:NVDA) is a no-brainer name when it comes to the best AI PC stocks, thanks to NVIDIA Corporation’s (NYSE:NVDA) wide range of chips it’s providing to power AI workstations and laptops. NVIDIA Corporation (NYSE:NVDA) is specifically targeting the AI PC market with NVIDIA Corporation (NYSE:NVDA) GeForce RTX™ GPUs and NVIDIA AI Enterprise software. NVIDIA Corporation (NYSE:NVDA) recently teased RTX AI laptops at Computex 2024.
While NVIDIA Corporation (NYSE:NVDA) is one of the best AI PC stocks based on hedge fund sentiment, many circles have voiced concerns over NVIDIA Corporation’s (NYSE:NVDA) valuation and whether the stock would be able to continue on its growth trajectory. NVIDIA Corporation (NYSE:NVDA) expects $28.0 billion in revenue for the second quarter of fiscal 2025, which was a sharp decline in growth rate according to many. Analysts also believe competitive threats to NVIDIA Corporation (NYSE:NVDA) are growing. AMD Ryzen AI 300 Series processors are powering many AI PCs developed by partners which include Microsoft. Microsoft CEO Satya Nadella recently praised AMD and said his company was “excited” to partner with AMD to deliver these new Ryzen AI powered Copilot+ PCs. Microsoft will be using MI300X Accelerators to power Azure’s OpenAI workloads. NVIDIA Corporation’s (NYSE:NVDA) long-term growth of its Blackwell chips is also under threat from Chinese competitors like Huawei.
While NVIDIA Corporation (NYSE:NVDA) is still one of the top AI picks of hedge funds and Wall Street, there are some lesser known AI stocks with long-term growth potential and low valuations. If you are looking for an AI stock that is as promising as NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
RiverPark Large Growth Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its first quarter 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA): NVDA shares were our top contributor in the quarter following blowout 4Q results and 1Q guidance driven by strong data center sales. The company reported quarterly revenue of $22.1 billion, up 265% year-over-year, and EPS in the quarter of $5.16, up 487% year-over-year and 12% ahead of expectations. Revenue guidance for 1Q of $24 billion was 8% above very high expectations. The artificial intelligence arms race kicked-off by ChatGPT and Alphabet’s Bard, among others, has generated tremendous demand for Nvidia’s next generation graphic processors.
NVDA is the leading designer of graphics processing units (GPU’s) required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming-focused chip vendor to one of the largest semiconductor/software vendors in the world. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. Following recent results, Jensen Huang, founder and CEO of NVIDIA stated in the company’s press release, “a trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process.”
