We recently published a list of Top 12 AI Stocks Leading the ‘Great Tech Race’ to $4 Trillion According to a Famous Wall Street Analyst. Since NVIDIA Corp (NASDAQ:NVDA) ranks 4th on the list, it deserves a deeper look.
Wedbush Securities analyst Dan Ives has said in a new note that big tech giants are now running a “race” to capture the $4 trillion AI market, calling GPUs “diesel” or the new “gold” in the technology sector. Ives said the AI ”party” is just getting started, and the clock is ticking “9 p.m. to a party that will last until 4 a.m. with the rest of the tech world joining in now.” Ives thinks spending on GPUs and data centers is the “only game in town” Ives thinks the “first wave” of AI benefited the major tech giants leading the AI race, with the second, third “derivatives” and four that began to have ripple effects on other companies.
At a separate investment event, Ives recently predicted that the AI-led bull run could last another two to three years, saying that a year from now investors will be looking at 3 trillion to 4 trillion dollar market cap for big tech companies.
“The technology bull market is just beginning,” Ives reportedly said.
In his final note, Ives highlighted several stocks that he believes could benefit from the AI revolution. In this article we take a detailed look at these stocks and discuss their AI-related growth catalysts and see whether or not they are sound long-term investments. With each stock we have mentioned the sentiment of the hedge fund. Why are we interested in the stocks in which hedge funds accumulate? The reason is simple: our research has shown that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter strategy picks 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Nvidia Corp (NASDAQ:NVDA)
Number of hedge fund investors: 186
Wedbush’s Dan Ives thinks it’s only “9 p.m.” on the “AI party” that will last until “4 a.m.” and it’s all about Nvidia Corp ( NASDAQ:NVDA ) GPUs as analyst thinks that “the only game in town for GPUs to run generative AI applications all run through Nvidia.
UBS believes Nvidia Corp (NASDAQ:NVDA) is well-positioned to take advantage of the $331 billion market opportunity in the AI Enablement layer, thanks to its GPUs. In the Cloud segment of the Enabling layer, UBS thinks Nvidia Corp’s ( NASDAQ:NVDA ) DGX offering makes the company a promising player. Nvidia Corp (NASDAQ:NVDA) DGX Cloud is a supercomputing service that gives enterprises access to the software and infrastructure needed to train advanced models for generative AI. It is a combination of servers and workstations for optimizing deep learning applications through the use of general-purpose computing on graphics processing units (GPGPU).
In the intelligence and application layer of the AI value chain, UBS sees no apparent catalyst for Nvidia Corp ( NASDAQ:NVDA ) .
NVIDIA Corp’s (NASDAQ:NVDA) latest product announcements and plans revealed at Computex 2024 show that NVIDIA Corp (NASDAQ:NVDA) has a lot more in its arsenal to fuel its growth engine. Analysts like NVIDIA Corp ( NASDAQ:NVDA ) are moving on to the new AI architecture known as Rubin ( R100 ) and think its powerful H100 and Blackwell chips easily beat competitors.
NVIDIA Corp (NASDAQ:NVDA) will begin shipping the H200 in the second half of this year. At its GTC conference, NVIDIA Corp (NASDAQ:NVDA) unveiled three accelerators – the B200, GB200 and GB200 NVL72. All of these products provide growth catalysts for NVIDIA Corp ( NASDAQ:NVDA ) stock and justify the P/E multiple of 71, given NVIDIA Corp ( NASDAQ:NVDA )’s expected growth of over 100% this year and 32 % next year. Based on 2026 EPS estimates set by Wall Street, NVIDIA Corp (NASDAQ:NVDA) is trading at a forward P/E multiple of 35.74, which makes the stock’s valuation attractive given the growth catalysts it has .
RiverPark Large Growth Fund stated the following about NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA): Shares of NVDA were our top contributor in the quarter after finishing 4Q results and 1Q guidance driven by strong data center sales. The company reported quarterly revenue of $22.1 billion, up 265% year-over-year, and EPS in the quarter of $5.16, up 487% year-over-year and 12% ahead of expectations. Q1 revenue guidance of $24 billion was 8% above very high expectations. The artificial intelligence arms race started by ChatGPT and Alphabet’s Bard, among others, has generated tremendous demand for Nvidia’s next-generation graphics processors.
NVDA is the leading designer of graphics processing units (GPUs) needed for powerful computing. Over the past 20 years, the company has evolved through innovation and adaptation from a primarily gaming-focused chip vendor to one of the world’s largest semiconductor/software vendors. Over the past decade, the company has grown revenues at a compound annual rate of over 20% while expanding operating margins and, through its asset-light business model, generating ever-increasing amounts of cash flow. cheap. Following the latest results, Jensen Huang, founder and CEO of NVIDIA stated in the company’s press release, “a trillion dollars of installed global data center infrastructure will shift from general purpose to accelerated computing as companies race to applied generative AI to every product, service and business process.”
Overall, NVIDIA Corp (NASDAQ:NVDA) is ranked #4 on Insider Monkey’s titled list Top 12 AI Stocks Leading the ‘Great Tech Race’ to $4 Trillion According to a Famous Wall Street Analyst. While we acknowledge the potential of NVIDIA Corp (NASDAQ:NVDA), our conviction lies in the belief that AI stocks hold greater promise of delivering higher returns, and doing so within a shorter time frame. . If you’re looking for an AI stock that’s more promising than NVIDIA Corp (NASDAQ:NVDA) but trades at less than 5 times its earnings, check out our report on Cheapest AI stock.
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Disclosure: None. This article was originally published on Insider Monkey.