We recently published a list of 12 Best Automation Stocks To Buy According to Hedge Funds. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other best automation stocks to buy according to hedge funds.
The rise of generative AI has skyrocketed automation, while robotics are disrupting industrial automation. On the other hand, supply chain automation has reshaped traditional operations from removing warehousing bottlenecks to inventory management, and demand forecasting. In inventory tracking, advanced warehouse management networks, powered by AI and ML algorithms, assist in optimizing inventory placement, resource allocation, route planning, and more.
Robotics a Key Segment to Automation
Professional service robot sales soared by 30% in 2023, according to the International Federation of Robotics (IFR). IFR’s statistics department data shows that over 205,000 robotics units were sold in 2023, with Asia-Pacific accounting for 80% of global robotics sales. Transportation and logistics service robots sales accounted for 113,000 units in 2023, a rise of 35% from 2022. In addition to that, Medical robots are in huge demand, and medical robot sales soared by 36% to nearly 6,100 units in 2023.
Apart from robotics, quantum computing is revolutionizing various industries. Other technologies including virtual reality (VR), augmented reality (AR), big data, data analytics, and 5G technology are key to driving automation across various segments.
Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ) and Robo Global Robotics and Automation Index ETF (NYSE:ROBO) have surged more than 11% and 8.50% over the last year, respectively. Considering the growing demand for automation systems and robotics, automation stocks hold much promise.
Our Methodology
We used automation and robotics ETFs along with online rankings to shortlist an initial list of automation stocks. We then selected the 12 automation stocks that were the most widely held by hedge funds. The list is sorted in ascending order of the number of hedge fund holders, as of Q3 2024.
Why do we care about what hedge funds do? 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).
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NVIDIA Corporation (NASDAQ:NVDA)
No. of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) is the leading GPU manufacturer and produces high-end units widely used in AI. The chipmaker has entered the robotics segment with continuous development of its Isaac™ robotics platform. This platform supports application in research, development, and production of the next generation of Al-enabled autonomous machines and robots. Companies such as BYD Electronics, Siemens, Teradyne Robotics, and Intrinsic, are using the NVIDIA Isaac Robotics Platform for autonomous robot arms, humanoids, and mobile robots.
On January 28, Morgan Stanley analyst Joseph Moore lowered its price target on NVDA shares from $166 to $152, maintaining an Overweight rating. Moore pointed out that DeepSeek’s R1 AI model could introduce cost-reducing innovations in AI, which may impact NVIDIA. Although analysts have lowered the price target on NVDA, they are still optimistic about the company’s strong position in the semiconductor market and its dominance in the AI sector.
In the long term, NVIDIA (NASDAQ:NVDA) remains a top stock and can be a good buy considering the drop in its price. The rising demand for data centers and AI will continue to push the demand for NVIDIA’s GPUs. However, the demand for NVDA’s high-end units may drop if DeepSeek’s AI model sustains its hype in the long run.
Overall, NVDA ranks 1st on our list of best automation stocks to buy according to hedge funds. While we acknowledge the potential of NVDA to grow, our conviction lies in the belief that 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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Disclosure: None. This article is originally published at Insider Monkey.