1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
A caller asked about high-growth rate companies and asked if NVIDIA Corporation (NASDAQ:NVDA) was an example of that. Cramer replied:
“Well, okay, NVIDIA’s a really great example. Lemme tell you why. Because when you look at Nvidia on forward earnings or the estimates, it always looks expensive and then it so far trumps those estimates that when you look backward, it turns out that the stock was selling at a remarkably low price to earnings multiple. And that’s been the secret to Nvidia literally since 2012. Incredible. It just keeps doing that.”
NVIDIA (NASDAQ:NVDA) offers a range of solutions, including graphics processing units (GPUs) for gaming, enterprise workstations, and cloud-based computing, along with networking platforms, AI software, and platforms for automotive and robotics applications. It also provides services like the GeForce NOW game streaming service and Omniverse software for metaverse development.
Fred Alger Management 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.”
While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher 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.
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Disclosure: None. This article was originally published at Insider Monkey.
