We recently published a list of 12 Most Promising AI Stocks According to Wall Street Analysts. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other most promising AI stocks according to Wall Street analysts.
Artificial intelligence (AI) continues to accelerate rapidly, moving from emerging technologies to influencing how businesses carry out operations. As per SAP, the changes occurring in 2025 revolve around autonomous AI agents, specialized AI models, user interface design, and enterprise adoption patterns. On 13th January, an AI behemoth highlighted that the first Trump Administration focused on America’s strength and success in AI, boosting an environment where the broader US industry can compete.
Therefore, mainstream AI is now a critical part of every new application, which helps fuel economic growth, promote US interests, and make sure that America can sustain its leadership in cutting-edge technology. On a related note, Trump announced billions of dollars in private sector investment focused on building AI infrastructure in the country.
Trump Announces $500 Billion Investment for AI Infrastructure
US President Donald Trump announced a private sector investment of up to $500 billion focused on financing infrastructure for AI, targeting to outperform rival nations in the business-critical technology. Mr. President went on to add that ChatGPT’s creator OpenAI, SoftBank, and Oracle are discussing a JV called Stargate, which is expected to build data centers and create over 100,000 jobs in the US. Notably, these companies, together with several other equity backers of Stargate, decided to commit $100 billion for immediate deployment. The remaining investment is expected to take place over the upcoming 4 years.
As per Trump, this is the largest AI infrastructure project in history. Also, Stargate is expected to build the physical and virtual infrastructure which will focus on powering the next generation of AI, including data centers around the US.
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AI Rally to Continue in 2025, Says UBS
As per UBS, the AI rally has aided in driving 2 straight years of healthy returns for the NASDAQ Composite, which also includes a 28% rally last year. The Mag 7 group of technology stocks drove more than half of the S&P 500’s gains in 2024. In the previous year, continued upward revisions in AI capex from the Big 4 tech giants supported keeping the AI rally on track. UBS expects the upward revisions to continue over the near term.
Even though AI revenues might again lag behind capex in 2025, UBS expects that AI monetization will improve sharply in 2025. The AI adoption continues to accelerate across industries and is well-placed to broaden in 2025. Also, the arrival of more clearly useful AI agents is expected to further support return on investment (ROI).
Our Methodology
To list the 12 Most Promising AI Stocks According to Wall Street Analysts, we conducted extensive research and scanned through several online rankings. After getting an initial list of 15-18 stocks, we shortlisted the ones in which analysts saw upside potential. Finally, the stocks were arranged in ascending order of their average upside potential, as of January 21, 2025. We also mentioned hedge fund sentiments around each stock, as of Q3 2024.
At Insider Monkey we are obsessed with 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 Corporation (NASDAQ:NVDA)
Average Upside Potential: ~20.2%
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) is a leading player in the Al industry as its technology plays a key role in powering Al applications, primarily deep learning and machine learning. The company’s stock was again in the news after Trump’s announcement to invest significantly in Al infrastructure. Analysts at UBS expect that results for the current quarter and guidance for the fiscal first quarter will be healthy. Furthermore, the analysts also see revenue streams for NVIDIA Corporation (NASDAQ:NVDA) from OEMs as they build inventory. Blackwell, which was launched last year, is expected to act as a critical revenue driver for the company over the upcoming years.
NVIDIA Corporation (NASDAQ:NVDA) has made numerous strides in the Al and semiconductor sectors. It launched new generative Al models and blueprints in a bid to enhance its Omniverse platform, targeted at advancing robotics, AVs, and vision Al applications. Also, it announced a partnership with Arbe Robotics, focused on enhancing automotive free space mapping and Al-driven capabilities. The company will integrate Arbe’s ultra-high-definition radar technology with its in-vehicle computing platform.
Notably, JPMorgan Chase & Co. upped its price objective on shares of NVIDIA Corporation (NASDAQ:NVDA) from $155.00 to $170.00, giving an “Overweight” rating on 21st November. Infuse Asset Management, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“We do still own some NVIDIA Corporation (NASDAQ:NVDA) as the forward multiple isn’t egregious and it powers over 90% of AI workloads. This company is only becoming increasingly important though the hyperscalers are actively trying to save money through their own ASIC programs. The moat CUDA provides has been underestimated time and time again. While I don’t think Nvidia has quite the upside as some of the other companies in the portfolio, it has a product that the best companies in the world literally can’t get enough of.”
Overall, NVDA ranks 10th on our list of most promising AI stocks according to Wall Street analysts. 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 time frame. 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.
