We recently published a list of 10 Best Long Term Tech Stocks to Buy Right Now. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other best long term tech stocks to buy right now.
As per Deloitte, amidst uncertainties and economic turbulence, the broader technology industry can see growth in 2025, courtesy of elevated IT spending, AI investments, and a strong emphasis on innovation. Some analysts expect that global IT spending is expected to grow by 9.3% in 2025, with data center and software segments anticipating to increase at double-digit rates. Notably, worldwide spending on AI is projected to increase at a CAGR of 29% from 2024 to 2028.
Spending To Go Northwards, Says S&P Global
S&P Global sees global IT spending to increase by 9% in 2025, reflecting an improvement from the low 8% area in 2024, with AI spurring massive data center spending and enterprises renewing their investments in traditional hardware. The enterprises have been entering 2025 with a transition to the cloud, and they are slowly accelerating their investments in GenAI projects. The rating agency opines that hardware spending is expected to improve significantly in 2025.
The server shipments are expected to increase ~4% but revenue growth will be significantly higher considering high AI server ASPs. The firm sees network equipment and mobile telecom equipment makers returning to growth while storage sales are expected to grow ~4%. Hyperscale cloud providers are expected to sustain strong revenue growth of over 20%, and the rest of IT services can recover with a growth of ~5% after lackluster performance over the previous 2 years. S&P Global sees this recovery due to the early signs of demand stabilization during Q2 2024 and Q3 2024, with several IT service providers reporting growth in bookings for large transformation projects and improving annual contract values in critical verticals.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Key Trends for 2025
In 2025, Capgemini expects AI and GenAI to have a significant impact on companies’ priorities and also on several adjacent technology domains, including robotics, supply chains, and tomorrow’s energy mix. Autonomous intelligent systems continue to be more prevalent in performing certain tasks. The next step will be the rise of a ‘super-agent,’ who can orchestrate and optimize several AI systems. In 2025, such advancements are expected to allow new AI ecosystems throughout industries.
The businesses have been navigating complex and unpredictable market conditions. As per Capgemini, technologies such as AI, data, blockchain, IoT, and connectivity with terrestrial-satellite networks can help enhance cost efficiency, resilience, agility, and sustainability of supply chains. Furthermore, additional regulatory and environmental constraints are expected to make this pivot important to ensure competitiveness, agility, and resilience.
Our Methodology
To list the 10 Best Long Term Tech Stocks to Buy Right Now, we used a screener to shortlist the stocks catering to the broader technology sector. Next, we filtered out the ones that have at least 10%-12% revenue growth over the past 10 years and are popular among hedge funds. Finally, the stocks are arranged in ascending order of their hedge fund sentiment, as of Q4 2024.
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)
10-Year Revenue Growth: ~37.8%
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) offers graphics and compute and networking solutions. Tristan Gerra, an analyst from Robert W. Baird, maintained a “Buy” rating on the company’s stock. The associated price target stood at $195.00. The analyst’s rating is backed by a combination of factors reflecting NVIDIA Corporation (NASDAQ:NVDA)’s healthy market positioning and future growth potential. As per the analyst, the company’s advancements in AI data centers and their healthy relationships with renowned enterprise customers such as Ali and Tencent continue to drive the surge in orders.
Furthermore, the company’s integration of DSP on ASIC also showcases its support for emerging technologies such as CPOs and LPOs. Overall, the firm’s price target is backed by NVIDIA Corporation (NASDAQ:NVDA)’s healthy positioning and performance gains. The AI infrastructure build-out has been a major tailwind for the company. Notably, cloud service providers, consumer internet companies, and sovereign states continue to fuel demand for AI computing power. These favourable measures are expected to help NVIDIA Corporation (NASDAQ:NVDA)’s growth trajectory over the upcoming years.
Mairs & Power, an investment advisor, released the Q4 2024 investor letter. Here is what the fund said:
“We prefer to invest in our backyard, as Minnesota and the Upper Midwest are blessed with a rich and diverse business community. As such, seven out of our 10 largest relative bets are based in our region (MN, WI, IA, SD, ND, IL). That said, we are unafraid to look beyond our geographic area if we find exceptional opportunities. In 2019, we found such an opportunity in a graphics processing technology company called NVIDIA Corporation (NASDAQ:NVDA). At the time, we felt NVIDIA would be a good way to leverage the growing interest in video games, as most of its chips were popular amongst “gamers” to enhance graphics. But what really grabbed our interest was its smaller, albeit faster-growing, data center business that was positioned to benefit from the emergence of high-performance computing, such as deep learning and machine learning, and the related field of AI. The rest, as they say, is history. NVIDIA is one of a number of Technology holdings that we have added over the past decade, which has raised eyebrows since our Firm was well-known for avoiding the Tech Bubble in the late 1990s. Unlike the dot-com companies that operated at the turn-of-the-century, many of today’s technology companies are established businesses with significant cash flows. We have argued, and continue to argue, that many of these investments are perfectly aligned with our investments process in that they embody durable competitive advantages, above-average growth prospects, and excellent management teams.”
Overall, NVDA ranks 5th on our list of best long term tech stocks to buy right now. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued 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.
