We recently compiled a list of the 10 Best Stocks to Buy According to Navellier & Associates. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other stocks approved by Navellier & Associates.
Founded in 1987 by growth analyst Louis Navellier, Navellier & Associates is an independent firm based in Reno, Nevada. Navellier & Associates specializes in identifying market inefficiencies to find top-growth stocks through a disciplined quantitative and fundamental analysis system. With over 30 years of experience, they offer customized portfolio strategies for individual investors to maximize returns while managing risk. Unlike competitors who mimic indexes, Navellier aims to outperform them, resulting in low correlation with benchmarks and increased diversification.
Louis Navellier is the Founder, Chairman of the Board, Chief Investment Officer, and Chief Compliance Officer of Navellier & Associates, Inc. With decades of experience applying academic techniques to real market scenarios, he advocates for disciplined quantitative analysis to identify stocks that can outperform the market. His approach involves a rigorous three-step process: quantitative analysis, fundamental analysis, and optimization of selected securities for portfolio inclusion. This approach has been used by the firm where they employ a highly disciplined, bottom-up stock-selection process for most portfolios. First, they screen market and stock statistics to measure reward (alpha) and risk (standard deviation), selecting stocks in the top percentiles. Next, they further screen the top-ranked stocks for high-profit margins, strong earnings growth, and reasonable price/earnings ratios based on future earnings. Finally, a proprietary optimization model maximizes portfolio alpha while minimizing standard deviation, creating well-diversified portfolios across various sectors and industries.
Since 1980, he has shared his insights through the MPT Review, a stock advisory newsletter. Since 1987, he has actively managed individual portfolios, mutual funds, and institutional portfolios. Known for his charismatic leadership, Louis Navellier has been featured extensively in international media, including CNBC, Bloomberg, The Nightly Business Report, and Wall Street Week. His insights have also been highlighted in Barron’s, Forbes, Fortune, Investor’s Business Daily, Money, Smart Money, and The Wall Street Journal. He has been profiled in books such as Kenneth A. Stern’s “Secrets of the Investment All-Stars” and Alan R. Ackerman’s “Investing Under Fire.” Mr. Navellier earned his B.S. in business administration in 1978 and his M.B.A. in finance in 1979 from California State University – Hayward.
Navellier & Associates is a well-known advisory firm with 1,314 clients and manages assets worth $743,578,818, as reported in their Form ADV from March 2024. Their Q1 2024 filing shows they handle $811,568,534 in securities, with the top 10 holdings making up 29.01% of the total.
Our Methodology
This article covers Navellier & Associates’ top 10 stock picks for the first quarter of 2024. We’ve included analyst ratings and key details about these companies, along with the number of hedge funds investing in each. Why focus on hedge fund investments? Our research indicates that copying the top picks of leading hedge funds can result in better-than-market returns. Our quarterly newsletter’s strategy, which chooses 14 small-cap and large-cap stocks each quarter, has achieved a 275% return since May 2014, outperforming the 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)
Navellier & Associates’ Stake Value: $53,432,970
Number of Hedge Fund Holders: 186
NVIDIA Corporation (NASDAQ:NVDA) ranks first in Navellier & Associates’ top 10 stock picks, holding 591,360 shares valued at $53,432,970. This investment makes up 6.58% of Navellier & Associates’ portfolio. NVIDIA Corporation (NASDAQ:NVDA) is a leader in graphics processing units (GPUs), which are crucial for AI and machine learning. Additionally, NVIDIA Corporation (NASDAQ:NVDA) is expanding into new markets such as data centers, automotive technology, and edge computing, which helps reduce risk and opens up more revenue opportunities.
NVIDIA Corporation (NASDAQ:NVDA)’s opportunity is huge, as seen with AI startup CoreWeave, which recently hit a $19 billion valuation due to its use of NVIDIA GPUs. As reported by CNBC, NVIDIA Corporation (NASDAQ:NVDA) controls 80% of the AI chip market, potentially translating to $1.8 trillion in sales with high profit margins. For fiscal year 2024, NVIDIA Corporation (NASDAQ:NVDA) is projected to generate $31.5 billion in revenue, up from $26.9 billion the previous year, thanks to strong demand for its GPUs in AI and data centers. NVIDIA Corporation (NASDAQ:NVDA)’s earnings per share (EPS) are expected to increase to $10.15, from $8.73 last year, and its gross margins are also expected to stay high at around 66%.
Polen Focus Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“In the second quarter, the dominant narrative in markets continued to be generative AI (GenAI). If it wasn’t immediately evident from NVIDIA Corporation’s (NASDAQ:NVDA) meteoric rise to among the largest companies in the world, one need only look so far as the Semiconductor and Technology Hardware industries as a gauge of sentiment, collectively accounting for greater than 70% of the Russell 1000 Growth (“the Index”) and 85% of the S&P 500 headline return quarter to date.
Our Portfolio has no exposure to NVIDIA or other Semiconductor companies currently benefiting from demand for foundational AI Hardware. The largest relative detractors in the quarter were NVIDIA, Apple, and Salesforce.
For the second quarter in a row, NVIDIA represented the top detractor to relative performance as the stock climbed another 37%, bringing the year-to-date return to +150%. As of this writing, NVIDIA is the third largest company in the world, but for a brief moment, it surpassed Microsoft to become the largest company in the world. Yet again, the company delivered blowout results that surpassed already lofty expectations, reinforcing the narrative that NVIDIA is the only obvious “AI winner” due to the amount of revenue it is currently generating…” (Click here to rad the full text)
Overall NVDA ranks 1st on our list of the best stocks to buy according to Navellier & Associates. You can visit 10 Best Stocks to Buy According to Navellier & Associates to see the other Navellier & Associates-approved stocks that are on hedge funds’ radar. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that 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 NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.
Disclosure: None. This article is originally published at Insider Monkey.