Top 10 Trending Stocks as AI Hype Fades

2. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Funds Investors: 193

Jim Lebenthal, Chief Equity Strategist at Cerity Partners, said in a latest program on CNBC that he bought NVIDIA Corporation (NASDAQ:NVDA) shares recently.

“What I’m saying is Microsoft is a great company—NVIDIA is a great company—you’re getting these stocks now at really good prices. If you just look back from a year from now, you’re going to probably feel these were very good buys. I bought Nvidia two weeks ago—right now it looks stupid—I get it. I’m willing to hang on for a month and see how it looks after that.”

NVDA will remain under pressure in the coming quarters when the company will report unimpressive growth.

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 process, set to be produced on its 18A or 14A node.

Columbia Threadneedle Global Technology Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2024 investor letter:

“NVIDIA Corporation (NASDAQ:NVDA) continued to outperform the market during the fourth quarter. The technology giant and top position in the fund delivered on sky-high expectations during the quarter and reported quarterly expectations that exceeded expectations. The red-hot company provided forward-looking expectations which were regarded as slightly lackluster as compared to prior quarters that smashed expectations. While the stock did churn a bit in the quarter, the AI giant remains top of mind for investors, especially as the company is on pace to satisfy the ‘staggering’ demand for its new product, Blackwell, which is poised to enter the market over the next year. The company’s position of owning all the major pieces of the evolving AI data center enables it to strengthen its competitive position and to define the technology roadmap for generations to come.”