We recently published a list of Analysts Are Talking About These 10 AI Stocks. In this article, we are going to take a look at where Nvidia Corporation (NASDAQ:NVDA) stands against other stocks that analysts are talking about.
Gene Munster from Deepwater Asset Management said in a latest program on CNBC that the AI hardware trade is still intact and the analyst believes DeepSeek is a net positive for the industry.
“The consensus DeepSeek has been a positive for AI. I think when it comes to the cost of AI inference, it’s going to go through the floor. Sam Altman said after DeepSeek that they expect the cost of tokens to go down 10 to 12x per year for their second-tier model. I mean, that’s basically through the floor. And I think the third piece to this, if those two happen, we get this hardware build-out, we the cost of compute or the cost of inference declining. I think you’re going to see some just profound impacts. And so I’m still bullish on this market. I think that what we’re seeing right now is a funk, and I think that we still got two great years left of this AI trade.”
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For this article, we picked 10 AI stocks currently making moves on the back of the latest news. With each stock, we have mentioned its hedge fund sentiment. 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 Investors: 223
Joshua Brown, the CEO and Co-founder of Ritholtz Wealth Management, said while talking to CNBC following the DeepSeek-triggered selloff that the Chinese breakthrough will increase the usage of AI. However, he believes the chances of major companies using the Chinese model for their Cloud operations are thin. Overall, Brown believes the hype around the potential impact of DeepSeek on Nvidia Corporation (NASDAQ:NVDA) was overdone.
“Most of this conversation about the impact of deep seek is happening on Twitter. If you know anything about Twitter—X—if you know anything about X, you know it’s loaded with hedge fund managers and asset managers who absolutely loathe the Mag 7. They’ve been waiting for this moment for two years. These stocks, Nvidia in particular, have been making them look bad for 24 straight months, and they’re dying for this moment where small caps are up, Europe is flat, value stocks are outperforming growth. They view this as comeuppance for the people who have been riding these giant tech stocks to huge gains. I think because there’s that desire to see these investors get beaten up a little bit, maybe that’s why some of the rhetoric about this being the end of Nvidia is getting so overdone.”
Mairs & Power Growth Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2024 investor letter:
“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 3rd on our list of stocks that analysts are talking about. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that under the radar 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.