3. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 193
Sarah Kunst, Cleo Capital managing director, said in a latest program on CNBC that NVIDIA Corp (NASDAQ:NVDA) has become a victim of its own success amid high expectations of investors. The analyst believes DeepSeek will not hurt NVIDIA Corp (NASDAQ:NVDA) demand because when something becomes cheaper, consumers tend to use more of that.
“DeepSeek is fascinating because it was sort of the most successful psyop we’ve seen in a while. It’s a good program, and there are other good similar programs coming out of China, and they will continue to. They’ll come out of anywhere we have smart engineers all over the world. But for some reason, that really hit Nvidia hard because people don’t understand that when something is cheaper and more plentiful, you know, we tend to use more of it, which is funny because as Americans, we certainly know that to be true. Gas gets cheaper, people buy bigger cars that require more gas, and so we know that sort of in our day-to-day life. But these analysts, I think, continue to miss that when it comes to Nvidia, and they’re just having a really hard time kind of keeping the faith.”
Guinness Global Innovators stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2024 investor letter:
“For a second year running, NVIDIA Corporation (NASDAQ:NVDA) was the Fund’s top performing stock, delivering a stellar return of +177.7% over the year. Since the beginning of last year, Nvidia’s ‘Hopper’ GPUs have been at the centre of exploding demand for chips powerful and efficient enough to facilitate the energy intensive requirements of AI processes within datacentres. Initially possessing over 95% of market share in these types of chips, Nvidia have been quick to entrench their position as the technological leader in the space, launching the successor to the current ‘Hopper’ GPU in March, Blackwell, inhibiting the likes of AMD and Intel making meaningful inroads in taking share of the fast-growing market. Compared to the previous iteration (Hopper) which is continuing to fuel Nvidia’s extreme revenue growth, the Blackwell chip is twice as powerful for training AI models and has 5 times the capability when it comes to “inference” (the speed at which AI models respond to queries). Throughout the year, Nvidia’s financial performance has remained resilient. Quarterly revenues hit $35.1 billion in their most recent quarter, beating consensus expectations by 6% and representing a +94% year-over-year increase. Additionally, Nvidia’s data centre segment, driven by the Hopper (H100) chip, grew fivefold over the past year, underscoring the sustained demand for advanced AI infrastructure. The H100 chip, priced at around $40,000, continues to see significant adoption due to its ability to enhance AI model training efficiency while lowering overall costs. This growth is expected to continue as companies invest in upgrading existing data centres and building new ones, with Nvidia well-positioned to capture a significant share of the estimated $2 trillion market opportunity over the next five years. There have been some concerns over Blackwell production delays causing share price volatility however, Nvidia has recovered swiftly, driven by positive earnings results through the year and assurances from management regarding future supply. Additionally, the release of the H200 chip promises to extend Nvidia’s technological leadership, ensuring continued momentum into 2025. While Nvidia’s valuation remains a topic of debate, the stock is not at a significant premium to history, and it still appears reasonable given its dominant market position, innovative prowess, and exposure to long-term secular growth trends in AI, cloud computing, and data infrastructure. As a result, Nvidia remains well-positioned to deliver sustained outperformance over the long term, making it a cornerstone of growth-oriented portfolios.”
