We recently compiled a list of the 12 Best High Volume Stocks to Buy According to Analysts. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other high volume stocks.
Understanding trading volume is crucial for investors as it reveals the number of shares exchanged in a given period, which signals market interest and momentum. Stocks are classified as high or low volume based on this activity. High-volume stocks are the ones that are typically trading 500,000+ shares daily, and offer benefits like minimized volatility and tighter spreads, although they may involve speculative plays. Conversely, low-volume stocks present potential opportunities for value investors, though they carry higher volatility and liquidity risks. Analyzing volume helps identify market trends, confirm breakouts, and inform buy and/or sell decisions, especially for short-term trading strategies. However, it’s essential to consider volume alongside other factors for a comprehensive investment approach.
On February 20, Drew Matus, Chief Market Strategist at MetLife Investment Management, appeared on CNBC to discuss stock rotations and their implications for the market. When asked about the lack of upward revisions from the MAG7, Matus emphasized that it would be healthy for the market to see a rotation where the other 493 stocks in the S&P 500 begin to contribute more significantly. He explained that high concentration in equities tends to create instability, and a broader participation in growth would signal a healthier economic environment. The discussion then highlighted the evidence of this rotation, as the S&P Equal Weight index is up about 4.25% year-to-date, closely matching the 4.5% gain of the market-cap-weighted index. Matus acknowledged this trend and its importance, noting that slightly higher inflation has been manageable for companies able to pass along costs. He also pointed out that growth numbers remain strong and optimism persists, particularly among small business owners.
Methodology
We first used stock screeners to compile a list of stocks with high average 3-month volumes. We then selected 12 stocks that had a high average upside potential of over 25% and were the most popular among elite hedge funds. The stocks are ranked in ascending order of their average upside potential. We’ve also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.
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)
Number of Hedge Fund Holders: 223
Average Volume (3-Month): 244.481 million
Upside Potential as of February 19: 25.06%
NVIDIA Corporation (NASDAQ:NVDA) is a global technology leader that provides a suite of graphics, compute, and networking solutions. These power several industries, ranging from gaming and professional visualization to data centers and autonomous vehicles.
The company received a reiterated Buy rating and $195.00 price target from Benchmark Co.’s Cody Acree on February 11, who cited new auto growth opportunities for this sentiment. He stated that the company aims to use its existing dominance to expand into emerging sectors, and it sees the automotive industry as a prime example of this strategy.
In FQ3 2025, the company’s automotive segment reached a record revenue of $449 million. This was a 30% sequential jump and a 72% surge year-over-year. The primary drivers of this growth are the increasing adoption of NVIDIA Corporation (NASDAQ:NVDA)’s Orin platform for self-driving vehicles and the market demand for navigation systems (NAVs). The Orin platform is a high-performance system-on-a-chip (SoC) designed specifically for autonomous vehicles. It enables advanced AI processing for tasks like perception, planning, and control. Its increasing deployment signifies a shift towards more sophisticated self-driving capabilities in the automotive industry.
An example of this adoption is Volvo Cars’ rollout of its fully electric SUV, which is built on the Orin and DriveOS platforms. DriveOS is NVIDIA Corporation (NASDAQ:NVDA)’s software platform for autonomous vehicles, which provides the necessary tools and infrastructure for developing and deploying self-driving applications. Volvo’s integration of these technologies demonstrates the real-world application of NVIDIA Corporation (NASDAQ:NVDA) automotive solutions and their impact on the EV market.
The company’s strong performance is due to its position in key growth areas like AI. This helps it exceed financial expectations and demonstrate exceptional product demand and growth potential. Alger Spectra Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q4 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. In our view, Nvidia’s computational power is a critical enabler of AI and therefore essential to AI adoption. Shares contributed to performance during the quarter, driven by strong demand for its data center products, especially the Hopper H200 chips, which generated double-digit billions in revenue, marking the fastest product ramp in the company’s history. Management provided fiscal fourth-quarter revenue guidance above analyst estimates, along with resilient operating margins supported by robust demand and limited competition. In our view, Nvidia’s leadership in scaling AI infrastructure, including advancements in inference and test-time scaling (i.e., reasoning during inference), is driving adoption among enterprises and startups, providing continued demand for its high-performance chips and software solutions. As older-generation chips are repurposed for inference and new clusters are deployed, we believe Nvidia is well-positioned to capitalize on growing compute needs across AI applications.”
Overall NVDA ranks 12th on our list of the best high volume stocks to buy according to analysts. While we acknowledge the 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 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 Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
