We recently published a list of 10 Best Stocks to Buy for the Next 3 Months. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other best stocks to buy for the next 3 months.
The year 2025 began with the surprise announcement of DeepSeek AI, launched in China, which shook the markets. Further volatility was experienced when the US government implemented trade tariffs across China and Europe. In March, President Trump suggested that his proposed reciprocal tariff regime would offer “flexibility”, giving investors some relief. Although it is unclear what the term “flexibility” would entail. Rising tensions from conflicts in the Middle East and Europe added to market uncertainty. Looking ahead, investors will be watching closely for fresh economic indicators to assess the Fed’s stance on future interest rates.
The hedge fund industry is seen as a trusted source of investment opportunities. According to a report published by Reuters, assets have grown by nearly 56% since 2015. The industry had $4.51 trillion in assets under management (AUM) in 2024, 9.75% higher compared to the previous year. Total assets were the highest amount since 2021, rising by $401.4 billion in 2024 due to strong performances across different strategies.
In terms of returns, hedge funds continued to show improvement year-on-year. As per a report by Pivotal Path, hedge funds returned 5.7% in 2023 and 10.7% in 2024, while some managers showed gains above 50%. This performance substantiates the industry’s influence on markets.
Looking ahead, the hedge fund landscape is poised for significant changes in 2025, driven by evolving market conditions, technological advancements, and shifting investor preferences. Mordor Intelligence predicts that the US Hedge Fund Market will have a market size of $2.95 trillion in 2025 and is expected to reach $4.05 trillion by 2030, a CAGR of 6.52%.
Hedge funds have introduced new strategies for mitigating market risks for improved returns to their investors. These include diversifying towards smaller multi-strategy funds. After a decade of fluctuating demand, smaller multi-strategy funds have begun to show interest. In 2024, with traditional asset classes facing challenges from rising P/E ratios and tight credit spreads, the uncorrelated returns of reinsurance-linked strategies have become increasingly attractive. This is expected to drive substantial capital inflows into the sector in 2025, particularly from institutional investors seeking diversification and higher returns. Investors who can assess the market dynamics, adapt to changes, and identify future leaders in the space are well-positioned for success. Hedge funds have the resources to use advanced AI-driven technologies to predict market movements to ensure higher returns on volatile asset classes.
Investors seeking to mitigate the impact of such volatility will opt for more stable, low-risk investments such as fixed-income securities. These provide a continuous stream of income in periods of high interest rates. In contrast, those willing to take advantage of high interest rates would opt for sectors benefiting from such a scenario, including banking, real estate, or tech firms, which are geared to take on high market volatility.
Our Methodology
The best stocks to buy over the next three months are chosen based on hedge fund sentiment toward these investments. For this list, we used Insider Monkey’s Q4 2024 proprietary hedge fund holdings database and identified the 10 most popular hedge fund stocks. The stocks are ranked in ascending order of their hedge fund positions.
At Insider Monkey, we are obsessed with hedge funds. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA)
No. of Hedge Fund Holders: 223
Upside Potential: 45.37%
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computer, and networking solutions, including GPUs, software, and platforms for gaming, data centers, automotive, and AI. Its hardware-software integration, particularly its DGX cloud offerings, makes it a major player in AI and serverless computing.
NVIDIA Corporation (NASDAQ:NVDA)’s CEO, Jensen Huang, also stated an improvement in their product performance by millions of times over the past decade and expects similar growth over the next decade. While having an established dominance in hardware, it also has an overwhelming presence in the cloud, with 93% of GPU-accelerated instances being powered by the company’s hardware.
NVIDIA Corporation (NASDAQ:NVDA)’s earnings report for the final quarter of 2024 revealed revenue of $39.33 billion, an astounding 77.94% YoY rise, shattering estimates by $1.19 billion. EPS was $0.89, also beating estimates of $0.04.
The Semiconductor Industry Association (SIA), which includes NVIDIA Corporation (NASDAQ:NVDA) as a member, spoke about the importance of the US Trade Commission to look beyond tariffs and work with global allies to offset China’s attempts at dominating the industry.
”In semiconductors, as in other advanced technologies, China has pursued a wide range of policies and practices that seek to frustrate access for foreign products and companies to its domestic market, while offering an array of subsidies, discriminatory standards, preferential government procurement policies, local content requirements, and other measures intended to boost local producers and design-in domestically produced semiconductor chips into downstream products for sale in China’s domestic market as well as for products exported to the rest of the world.
We strongly urge USTR and other U.S. agencies to continue collaboration with G7 countries and other trusted partners and allies towards coordinated, multi-country solutions to the challenges outlined in this submission – solutions that maximize impact and minimize potential free-riding and backfilling.”
Overall, NVDA ranks 5th on our list of best stocks to buy for the next 3 months. 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.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
