We recently published a list of 10 Most Buzzing Stocks To Buy Now. In this article, we are going to take a look at where NVIDIA Corp. (NASDAQ:NVDA) stands against the other buzzing stocks.
Stock Market Volatility
September and October tend to be the most volatile months for the stock market, particularly during election years. This was recently discussed by Sam Stovall, the chief investment strategist at CFRA Research, who expects the volatility to stay until the end of October.
Stovall says that while the S&P 500 recovered all its 2022 bear market losses by January this year, and reached 22 new all-time highs by March, equities have digested some of these gains and experienced sector rotation away from 2023 high flyers into more defensive areas of the market. Hence, the year started great, but the markets are declining once again. The S&P 500’s average volatility in October 2023 was 35% higher than the average for the remaining 11 months of the year.
Investors are concerned that the Fed will be slower to lower interest rates while inflation remains sticky and GDP growth begins to cool. Stovall expects three 25-basis point cuts this year, followed by another four in 2025. He thinks that while a 50 basis point cut is rare since it only ever happened twice, in 2001 and then 2007, it is still not unlikely given that the economy is worse than expected.
According to Stovall, investors need to be prepared for this increased volatility as the market digests the Fed’s actions and the potential impact on the economy. The market will likely remain uncertain until the Fed can find the right balance between slowing down the economy and stopping inflation, without causing a recession.
Tom Lee, Fundstrat Global Advisors managing partner and head of research, is of a similar idea, suggesting that investors should remain cautious over the next 8 weeks, due to both uncertainty surrounding elections and the September cuts. He says that the stock market may experience a 7-10% pullback, considering there have already been two 7% corrections this year.
Lee thinks at least a 5% pullback can be anticipated, but if it’s only 1-2%, then that’s negligible. But despite the recommended caution for the 8 weeks starting September, he thinks the volatility does not translate into a tough full-year. He views this pullback as a buying opportunity, believing that the market has not yet reached its peak for 2024.
As Lee encourages investors to be ready to buy the dip, we are here with a list of the most buzzing stocks to buy now.
Note: All price/volume data is as of September 6.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corp. (NASDAQ:NVDA)
Volume: 367.867 million
Average Volume (3-Month): 345.252 million
Number of Hedge Fund Holders: 179
NVIDIA Corp. (NASDAQ:NVDA) provides graphics, computing, and networking solutions, and is majorly known for manufacturing graphics processing units (GPUs). These chips are essential for rendering graphics, but they’re also used in AI, machine learning, and data centers.
Recently, Elon Musk announced that Colossal, an AI training system, had been brought online by his AI startup, xAI. The system is powered by 100,000 H100 GPUs made by NVIDIA Corp. (NASDAQ:NVDA). For comparison, Google’s AI model uses 90,000 GPUs while Meta’s uses 70,000. H200 and the rumored Blackwell-based GPUs are slowly replacing the H100 GPUs.
Musk has already announced that Colossal would double in size by shifting to H200 GPUs in the coming months. He claims only 50,000 replacement H200 GPUs would achieve size doubling. The Blackwell chips are even faster and more efficient, the top-end capacity being 36% higher than the H200 and 66% higher in total bandwidth.
In FQ2 2025, the company recorded a year-over-year improvement of 122.40% in revenue. Data center revenue was up 54% year-on-year, driven by strong demand for NVIDIA Hopper, GPU computing, and networking platforms. Cloud service providers represented roughly 45% of data center revenue.
179 hedge funds held the company’s shares. Fisher Asset Management is the biggest shareholder with shares worth $11.54 billion, as of June 30. In late August, management also approved a buyback of $50 billion in equity shares.
NVIDIA Corp. (NASDAQ:NVDA) faces pressure to launch new products to maintain investor confidence. Delays in Blackwell chip production and concerns about high GPU prices impact the demand. The company’s future success depends on effective AI monetization. By the end of fiscal year 2025 and each year after, it aims to achieve and maintain 100% renewable electricity for its offices and data centers.
Alger Spectra Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality, and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super-computing parallel processing techniques for solving complex computational problems. Simply put, Nvidia’s computational power is a critical enabler of AI and therefore essential to AI adoption, in our view. During the quarter, the company reported better-than-expected fiscal first quarter results driven by strong demand from data centers. Additionally, management noted that large cloud service providers, contributing approximately 45% of data center sales, recognize the high return on investment offered by Nvidia’s computing solutions, which are driving AI spending. The company also introduced its next-generation H200 chip, which nearly doubles the inference performance compared to the H100 chip, enhancing how trained AI models process new data. Lastly, management raised their fiscal second quarter guidance, noting that demand for their current H100 chips remains strong, and that demand for their next generation products is estimated to outstrip supply over the next year. We continue to believe the company is well positioned to potentially benefit from the growing AI data center workloads, which are driving demand for the increased interconnections and fully accelerated software stacks, thereby enabling leading application performance and fast result times.”
Overall NVDA ranks 3rd on our list the most buzzing stocks to buy. While we acknowledge the growth potential of NVDA as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
