We recently compiled a list of the 19 Trending AI Stocks on Latest Analyst Ratings and News. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other trending AI stocks.
Exciting new developments in the artificial intelligence space have continued to pour in over the past few days as the stock market recovers from a major tech selloff. Some of the most trending ones relate to electronics giant Apple, Microsoft-backed AI startup OpenAI, and software firm Adobe. Apple has doubled down on AI with the release of macOS Sequoia, which integrates AI features designed to enhance device performance and user experience. These AI enhancements include real-time content generation and AI-driven privacy tools. With iPhone sales slowing, Apple is banking on AI to reinvigorate interest in its devices, setting itself apart in an increasingly competitive tech market.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and AI News You Should Not Have Missed.
On September 13, OpenAI released the highly anticipated Strawberry model, which aims to tackle complex challenges in AI development, including more nuanced decision-making and language processing. This model is expected to advance the capabilities of OpenAI in both consumer-facing tools and enterprise applications. Similarly, Adobe is also making major moves with the Firefly AI video tools, set to debut by the end of 2024. These tools allow users to generate videos from text and images, offering functions like Generative Extend to enhance existing videos. This positions Adobe at the forefront of generative AI for content creation, with a focus on commercial safety by using licensed datasets.
Looking ahead, Wall Street analysts project significant revenue and earnings growth for key players in the AI space, particularly in semiconductor companies that power AI applications. NVIDIA, for example, is forecast to achieve an impressive 27% annual revenue growth, outperforming both the semiconductor industry and the broader US market. The total revenue for the chipmaker in 2025 is expected to reach around $123 billion, with earnings projected to grow by over 24%. The upcoming Blackwell GPU architecture, which offers a 3.7x performance improvement over a predecessor, is seen as a critical driver of AI growth for NVIDIA in the next few months.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
Our Methodology
For this article, we selected AI stocks based on the latest news and analyst ratings. These stocks are also popular among hedge funds. Why are we interested in the stocks that hedge funds pile into? 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)
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. The company is a leader in the AI hardware space, controlling nearly 90% of the market for AI GPUs. However, the AI software capabilities of the firm often go under the radar. NVIDIA has a distinct advantage over competitors like Intel and AMD when it comes to AI software offerings. Some examples of this include the CUDA and AI Enterprise software marketed by the chipmaker. The company charges $4,500 per GPU per year for AI software and tech giants that pay for NVIDIA GPUs also pay for these software features in advance. Within the AI software, the firm also markets the DGX Cloud, a cloud service that allows users to train and deploy AI models over the cloud. This service costs a whopping $37,000 per month.
Wall Street analysts have been monitoring NVIDIA Corporation (NASDAQ:NVDA) closely. Morgan Stanley has an Overweight rating on the shares with a price target of $144. In a recent investor note, analyst Joseph Moore detailed that the advisory expected initial volumes of Blackwell in the October quarter, as the initial product was functional but with somewhat lower yields, and still expected a volume ramp of the next revision of silicon through January – all of which was still within the broad brush strokes of guidance.
Overall NVDA ranks 1st on our list of the trending AI stocks. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some 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.
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Disclosure: None. This article is originally published at Insider Monkey.