We recently compiled a list of the 10 Hot AI Stocks to Watch Right Now. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other AI stocks.
As AI continues to redefine the workforce, companies such as DeepSeek are at the forefront of this revolution. The R1 model, in particular, has made investors realize how AI models can be developed with lower costs and less advanced software. Nevertheless, AI enablers continue to create AI-specific semiconductor chips, build out compute power, and develop platforms that foundation models can use to operate.
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“On one hand, the DeepSeek approach showed that you can optimize your model building process so that you require much lower compute power. That has a negative impact on Nvidia. However, the obvious thing is now you’ll find a lot of people building foundation models. Foundation models are not going to be just for the top five companies or so that have hundreds of millions of dollars to build the infrastructure.”
-Mohamed Elgendy, co-founder and CEO of enterprise AI platform Kolena.
The gist of it all remains that even though DeepSeek marks a shift toward accessible AI development, powerful computational resources are still going to be needed as AI adoption scales. However, AI’s impact extends beyond the tech world, also disrupting the way people are going to work in the evolving landscape.
Generative artificial intelligence isn’t just another invention, Aneesh Raman, chief economic opportunity officer at LinkedIn, recently remarked. Now that it is disrupting entire industries and economies, it may also hold the power to set up an entire economy in motion.
“But [generative AI] isn’t just another invention. It’s a turning point, forcing us to rethink not just what work is, but what it means to be human at work.”
-Aneesh Raman, chief economic opportunity officer at LinkedIn.
That’s right, artificial intelligence is pushing us into a new work era.
“For centuries, work was about our physical abilities on farms, and then again in the factories. It’s only been the past couple decades that work has been about our intellectual abilities…
“The knowledge economy is on the way out, and a new economy is on the way for us humans at work…I’m calling it the innovation economy.”
According to Raman, physical tasks are now being handled by automation, and intellectual ones are being taken over by AI. This leaves humans to be defined by their social abilities, he said. He further noted that in this era, human innovation and unique human skills, such as social and emotional intelligence, are going to be key determinants.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is 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)
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. One of the biggest analyst calls on Tuesday, February 25, was for Nvidia Corporation. Truist Securities analyst William Stein reiterated a “Buy” rating on the stock with a $204.00 price target, stating that Nvidia is “still the AI leader and the one to own” ahead of earnings on Wednesday.
“Heading into CQ4 (Jan) results, NVDA is still the AI leader and the one to own; Lots of noise, but the data we trust most is encouraging. NVDA reports its CQ4 (Jan.) result on Weds 2/26. We expect NVDA will (1) deliver upside vs. consensus in its CQ4 (Jan) results & CQ1 (Apr) guidance, (2) highlight a narrowing of SKUs around the NVL72 configuration, (3) express confidence in CY25 owing to very robust backlog, and (4) focus on the next drivers of growth after LLMs: data processing, and physical AI. Our CY26 EPS is $5.84; PT is $204 based on 35x P/E (15x discount to hi-growth semis).
We expect NVDA will deliver modest upside relative to consensus for CQ4, and will guide CQ1 ~inline with sell side consensus of $42B. Inline with our industry contact feedback, we expect the company to discuss a consolidation of Blackwell SKUs around the NVL72 system. The capex data points bode well for NVDA’s backlog and medium-term outlook. Looking further into the future, we expect management to discuss emerging AI models & techniques including data processing and physical AI (robotics). We expect this will be a positive catalyst for the stock…and the next one will be GTC in March.”
-William Stein
Overall NVDA ranks 2nd on our list of the hot AI stocks to watch right now. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some 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.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
