1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders as of Q4: 223
Arrowstreet Capital’s Equity Stake: $8.84 Billion
On March 10, 2025, Melius Research analyst Ben Reitzes maintained a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) but lowered his two-year price target from $195 to $170, citing various challenges impacting the stock in the short term. He pointed to factors such as potential tariffs, regulatory restrictions, and advancements in computing that reduce costs as key pressures on Nvidia and other AI-related stocks. In a client note, Reitzes remarked that uncertainty in the sector has led to erratic trading behavior, with even NVIDIA Corporation (NASDAQ:NVDA) shares reflecting market confusion. The upcoming GTC conference in San Jose, where CEO Jensen Huang will deliver a keynote address on March 18, is seen as a potential turning point for the stock.
Despite the recent downturn, analysts believe Nvidia’s fundamentals remain strong, with impressive Q4 earnings reinforcing its leadership in AI technology. NVIDIA Corporation (NASDAQ:NVDA) delivered impressive financial results for the quarter ending January 2025, surpassing both its own guidance and analyst expectations. The company reported revenue of $39.3 billion, reflecting a 12% sequential increase and a remarkable 78% year-over-year growth. A key driver of this success was Nvidia’s data center segment, which saw a 93% increase year-over-year, cementing its role as a once-in-a-generation growth catalyst. Additionally, revenue from the newly launched Blackwell products reached $11 billion, exceeding management’s forecasts. Despite a 150-basis-point sequential decline, NVIDIA Corporation (NASDAQ:NVDA) maintained an adjusted gross margin of 73.5%, aligning with guidance as the company navigated higher costs associated with Blackwell’s introduction.
Looking ahead, Nvidia remains optimistic about its continued growth trajectory. The company has projected revenue of $43 billion for the April quarter, which would mark a 9% sequential increase and a 65% rise year-over-year. This forecast also surpasses consensus estimates of $42.1 billion, reinforcing NVIDIA Corporation (NASDAQ:NVDA)’s strong market position and its ability to drive demand for cutting-edge AI and data center solutions.
Overall, NVIDIA Corporation (NASDAQ:NVDA) ranks first on our list of Arrowstreet Capital’s top 10 stocks to buy. While we acknowledge the potential for 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 time frame. If you are looking for an 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.
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