We recently published a list of 10 Best Stocks to Buy According to Billionaire Ken Fisher. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other best stocks to buy according to billionaire Ken Fisher.
Ken Fisher is a prominent American investor and financial analyst, known for founding Fisher Investments in 1979. Born in San Francisco in 1950, he is the son of influential stock investor Philip A. Fisher. Fisher graduated from Humboldt State University with a degree in economics in 1972. He began his career in investment management and quickly made a name for himself through innovative approaches to investment theory.
Under Fisher’s leadership, the firm has been recognized for its investment strategies and has consistently ranked among the top investment advisers in the U.S. For several years, Fisher Investments has been included in the Financial Times’ list of top Registered Investment Advisors. Fisher is also a best-selling author, having written multiple books on investment strategies, and he is known for popularizing concepts like the Price-to-Sales ratio as a tool for stock analysis
Understanding Bull Markets and the Role of Technology in Investment Strategies
Ken Fisher talked about the markets in a September 2024 video that was posted on his firm’s YouTube channel, Fisher Investments, and mentioned that he frequently gets asked about which sectors he believes will outperform or underperform over the next 18 months. He currently sees the market in the later stages, though not at the end, of a somewhat unusual bull market shaped by the unique challenges since COVID-19 began. As this bull market nears its two-year mark in October, he observes that while major trends may not shift significantly in the immediate future, technology stocks have consistently outperformed non-tech stocks since the market began to recover from the pandemic.
Fisher noted that, when the market sees substantial movement, up or down by half a percent or more, technology stocks tend to follow that trend more intensely. Thus, if the market is expected to rise, tech stocks will likely perform well; conversely, they often lag during market downturns.
Ken Fisher Predicts Shift as Value Stocks Begin to Outperform Growth Amid Fed Rate Speculations
Ken Fisher noted that as 2024 progressed, he expected value stocks to begin outperforming growth stocks more than they had in the past. While this expectation did not materialize in the first and second quarters, he observed that the trend started to emerge in the third quarter. However, he was surprised to see that energy stocks continued to underperform compared to most value stocks.
“As 2024 progressed, and as I said in prior videos early in the year, I expected value to start doing better relative to growth than it had been before. And that didn’t really much happen in the first and second quarters. But in the third quarter of 2024, that’s largely happened, with the exception of the fact that energy, and I was completely wrong about this, energy has continued to do worse than most value.”
Additionally, Fisher said that initially when the Fed began raising rates in 2022, many thought this would negatively impact growth stocks, a narrative he consistently disagreed with. Now, the sentiment is shifting again, suggesting that central bank rate cuts will benefit value stocks while adversely affecting growth stocks. This shift is logical because value stocks are more reliant on bank financing compared to growth stocks, which have various funding sources.
As short-term interest rates decline relative to long-term rates and banks become more willing to lend, this scenario favors value stocks. Consequently, Fisher anticipates that the trend of value stocks narrowing the gap with growth stocks, seen in the third quarter, will continue into the fourth quarter and throughout much of the next year.
Our Methodology
This article explores the top ten stock holdings of Fisher Asset Management, based on 13F filings as of Q2 2024. The stocks are arranged in ascending order according to the stake of Fisher Asset Management, as of June 30, 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)
Total Number of Shares Owned: 93,437,327
Total Value of Shares Owned: $11,543,247,605
Number of Hedge Fund Investors: 179
NVIDIA Corporation (NASDAQ:NVDA) is a powerhouse in GPUs and AI technology, driving advancements across gaming, AI, and autonomous vehicles. The company’s positive outlook is bolstered by its leadership in the AI and machine learning sectors, where its GPUs are crucial for powering advanced applications, positioning NVIDIA to capitalize on the growing adoption of AI solutions across industries.
NVIDIA Corporation (NASDAQ:NVDA)’s data center segment is also experiencing rapid growth, fueled by the rise in AI and cloud computing as organizations migrate to these services, placing NVIDIA to capture a significant share of this expanding market. With a strong financial foundation, NVIDIA continues to invest heavily in research and development, ensuring it remains at the forefront of innovation. Its robust cash flow further enables strategic acquisitions and partnerships to drive accelerated growth.
In Q3 2024, NVIDIA Corporation (NASDAQ:NVDA) surpassed estimates, reporting a normalized EPS of $0.68, beating projections by $0.04, with revenue of $30.04 billion, exceeding forecasts by $1.29 billion. As NVIDIA approaches its Q4 earnings report on November 20, 2024, analysts project a normalized EPS of $0.74 and revenue of $32.94 billion. Over the last 90 days, NVIDIA Corporation (NASDAQ:NVDA) has received 32 upward EPS revisions, reflecting strong investor confidence in its sustained momentum and leadership within the semiconductor industry.
ClearBridge Large Cap Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2024 investor letter:
“This focus on consistency also guides our regular trimming of strong performers to manage stock-specific and overall portfolio risk. The quarter saw us continue to trim NVIDIA Corporation (NASDAQ:NVDA), reducing the GPU chipmaker from an active weight in the portfolio to an underweight versus the benchmark. We continue to believe in Nvidia’s 10-year trajectory as hyperscaler and enterprise customers invest in GPU architecture. However, we have reduced our Nvidia position as its valuation now more fully reflects the company’s robust growth path and as estimates have risen to levels that require a very steep growth trajectory to drive further stock appreciation.”
Overall, NVDA ranks 3rd on our list of best stocks to buy according to billionaire Ken Fisher. While we acknowledge the potential of NVDA, 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 timeframe. If you are looking for an AI stock that is more promising than the ones on our list 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.