3. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Funds Investors: 193
Kevin Hincks from TD Ameritrade said in a program on Schwab Network earlier in April that NVIDIA’s Corp (NASDAQ:NVDA) demand remains strong
“I think the Blackwell numbers for the fourth quarter last year were way better than expected. I think there’s still everyone, Tom, there’s no cracks in the demand story for NVIDIA Corp (NASDAQ:NVDA) and chips in general. Everyone is confirming that demand is crazy. OpenAI just—or yeah, OpenAI ChatGPT—they just confirmed their demand is still strong. So I just think there’s so many things, and Tom, here’s my question that I used to say about Tesla a lot, now I say about NVIDIA Corp (NASDAQ:NVDA): what’s in their pipeline? We know the Rubin chips are in their pipeline, and I’ll give investors, our viewers, one thought—what if they have a Palantir story, Tom? What if they take something that’s general to hyperscalers and make it for the general public? What if they start doing that? Think of what that could do to their demand, right? And so what’s the next generation of what NVIDIA Corp (NASDAQ:NVDA) is doing? Jensen Huang, really smart guy, is good at what he does. And so I think this is a sell-off with the rest of the market, a little bit heightened because of the popularity of NVIDIA Corp (NASDAQ:NVDA).”
Nvidia is facing challenges at several levels. Competition is one of them. Major competitors like Apple, Qualcomm, and AMD are vying for TSMC’s 3nm capacity, which could limit Nvidia’s access to these chips. Why? Because Nvidia also uses TSMC’s 3nm process nodes. Nvidia is also facing direct competition from other giants that are deciding to make their own chips. Amazon, with its Trainium2 AI chips, offer alternatives. Trainium2 chips could provide cost savings and superior computational power, which could shift AI workloads away from Nvidia’s offerings. Apple is reportedly working with Broadcom to develop an AI server processor. Intel is also trying hard to get back into the game with Jaguar Shores GPU, set to be produced on its 18A or 14A node.
Alger Spectra Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2025 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. During the quarter, shares detracted from performance due to several factors. In January 2025, investor concerns grew regarding the emergence of advanced AI models from China, reportedly developed at lower costs and with reduced computing requirements, raising doubts about Nvidia’s market dominance. Additionally, U.S. President Donald Trump’s announcement of new tariffs targeting industries increased worries about higher operational costs. Despite these headwinds, Nvidia reported robust fiscal fourth-quarter results, highlighted by significant revenue growth driven by its data center segment. On the earnings call, CEO Jensen Huang emphasized the increasing computational requirements of future AI models, noting, “The more computation, the more the model thinks, the smarter the answer,” and adding that future reasoning models could demand substantially more compute resources. We believe Nvidia’s leadership in scaling AI infrastructure—including advancements in inference and reasoning during inference—continues to drive adoption among enterprises and startups, ensuring sustained demand for its high performance chips and software solutions. As older-generation chips are repurposed and new clusters deployed, we see Nvidia as well-positioned to capitalize on rising computational needs across AI applications.”
