We recently published a list of 10 Best Extremely Profitable Stocks to Buy Now. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other best extremely profitable stocks to buy now.
Can the S&P Hit 7,000 By the End of 2025?
Ed Yardeni, president of Yardeni Research, appeared on CNBC on November 27 to share insights on the market’s anticipated performance in 2025. He emphasized the significance of staying invested despite existing risks and high valuations, noting that the economy has shown resilience and interest rates have stabilized.
Yardeni pointed out that many new investors are gravitating toward small and mid-cap sectors, which he considers a sound strategy due to their relative affordability. He also highlighted the S&P 493 stocks as being undervalued compared to the Magnificent Seven, asserting that the overall market outlook remains positive despite potential tariff fluctuations. He believes that tax cuts and deregulation could enhance corporate earnings.
Yardeni attributed much of the market’s potential growth to an ongoing productivity boom, which he described as still being in its early stages. He noted that productivity levels have improved significantly from nearly zero in 2015 to around 2% currently, with historical precedents suggesting that such booms can reach as high as 4%. This improvement is driven by advancements in technology, which he argues will continue to drive productivity gains.
READ ALSO: 10 Most Promising New Technology Stocks According to Hedge Funds and 10 Best Tech Stocks to Invest In On the Dip.
When discussing whether this boom is primarily driven by artificial intelligence (AI), Yardeni acknowledged AI’s importance but also pointed to other technological advancements in cloud computing, robotics, and automation as contributing factors.
He identified a shortage of skilled labor as a key driver of productivity growth and explained that technology has enhanced efficiency, allowing wages to rise faster than prices, thus stimulating economic activity. In his concluding remarks, Yardeni projected that the S&P 500 could reach 7,000 by the end of 2025 and potentially hit 10,000 by the end of the decade, reflecting his bullish outlook on market performance fueled by these economic dynamics.
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
Our Methodology
To compile the list of the 10 best extremely profitable stocks to buy now, we used the Finviz stock screener, Yahoo Finance, and Seeking Alpha. Using the screener, we shortlisted stocks that have grown their revenue and net income by at least 25% over the past 5 years. After sorting our initial list by market cap, we cross-checked the revenue and net income growth rates from Seeking Alpha. We also considered the trailing twelve-month net income and selected stocks that had a trailing twelve-month net income of more than $500 million. Lastly, we ranked the stocks in ascending order based on the number of hedge fund holders in Q3 2024, sourced from Insider Monkey’s database.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
NVIDIA Corporation (NASDAQ:NVDA)
5 Year Revenue Growth: 62.43%
5 Year Net Income Growth: 92.10%
TTM Net Income: $53.01 Billion
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) is a leader when it comes to AI infrastructure. Previously its Gaming Processing Units (GPUs), revolutionized the PC gaming market and redefined computer graphics. At present its GPUs are powering the AI infrastructure from computers to data centers, autonomous driving vehicles, and robots.
While the Gaming segment engine of the company is still running, its application in the data center industry has shifted gears for the company. The company has grown to become the best extremely profitable stock to buy now. It has grown its revenue by 62% and net income by 92% over the past 5 years. Whereas, its trailing twelve-month net income stands at an impressive $53.01 billion.
To cater to the growing needs of data centers and artificial intelligence, NVIDIA Corporation (NASDAQ:NVDA) launched its Hopper platform in September 2022, which is a GPU architecture designed to handle high-performance computing. Currently, the Hopper platform demand for data centers is leading the company. During the third quarter results for fiscal 2025, total revenue of $35.1 billion for the company was driven by record year-over-year Data Center revenue growth of 112%.
The Data Center segment witnessed its H200 GPU sales increase to double-digit billions of dollars, which the management categorized as the fastest product ramp-up in its history. Moreover, its latest Blackwell platform architecture is also in full production and management anticipates its demand for Blackwell and Hopper platform will continue to increase due to their effective use cases in the artificial intelligence industry.
Columbia Seligman Global Technology Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2024 investor letter:
“The fund held an underweight position in NVIDIA Corporation (NASDAQ:NVDA) relative to the S&P North American Technology Sector, which was a headwind on performance following impressive returns from the company in 2023 and the first two quarters of 2024. NVIDIA’s stock fell during periods of the quarter after the company reported second quarter earnings. While the earnings came in higher than expectations, investors were concerned that the company did not guide earnings high enough, signaling a potential slowdown in AI buildout. NVIDIA’s demand remains strong and the company has forecast orders for upcoming quarters. The question that remains is whether the company can meet the demand for its AI processors and connectivity chips. Our team continues to remain cautious on NVIDIA’s high customer concentration. Microsoft and Meta have driven a significant amount of the company’s revenue, which presents added risk.”
Overall, NVDA ranks 1st on our list of best extremely profitable stocks to buy now. While we acknowledge the potential of NVDA to grow, our conviction lies in the belief that 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: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.