We recently published a list of 16 Trending AI Stocks Based on Latest Analyst Ratings and NewsIn this article, we'll take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands in comparison to other trending AI stocks.
In recent months, the AI industry has offered explosive opportunities in the development and deployment of AI infrastructure. Companies that provide AI chips, cloud services, and data storage solutions are poised to capitalize on the growing demand for AI capabilities. For example, NVIDIA, a leading provider of AI chips, has seen its shares surge 160% in 2024, driven by the increasing need for powerful processing capabilities in AI applications. Similarly, cloud service providers such as Amazon Web Services and Microsoft Azure are seeing increased demand for their AI and machine learning services, making them attractive options for investors.
Read more about these developments by going to 33 Top AI Companies to Watch Out For And 20 Industrial Stocks Already Riding the AI Wave.
However, amidst all the buzz around the new technology, investors should also pause to consider some of the risks and challenges that come with AI. Regulatory scrutiny of AI companies is intensifying, particularly around issues of data privacy, algorithmic bias, and the ethical use of AI. Governments around the world are beginning to implement regulations that could impact how AI technologies are developed and deployed. For example, the European Union has proposed an AI law that aims to create a regulatory framework that addresses the risks of AI while fostering innovation. This regulatory environment could lead to higher compliance costs and slower adoption rates in certain industries, posing potential risks for investors.
Another important consideration for investors is the talent shortage in the AI industry. The demand for skilled AI professionals far outstrips the supply, leading to intense competition among companies for top talent. This talent gap could slow the development and deployment of AI technologies, especially in smaller companies that may not have the resources to compete with tech giants like Google and Microsoft for talent. Despite these challenges, the overall outlook for the AI industry remains very positive. The continued advancement of AI technologies, coupled with their increasing integration across industries, provide a solid foundation for future growth.
Read more about these developments by going to Billionaire Stan Druckenmiller bets on AI infrastructure, tobacco and industrial stocks And 10 Tech Stocks to Watch During Market Volatility, According to Analyst Bernstein..
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 are jumping on? The reason is simple: our research has shown that we can outperform the market by imitating the best stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small-cap and large-cap stocks each quarter and has delivered a 275% return since May 2014, outperforming the benchmark by 150 percentage points (see more details here ).
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NVIDIA Corporation (NASDAQ:NVDA)
Number of hedge fund holders: 179
NVIDIA Corporation (NASDAQ:NVDA) is a provider of graphics, computing, and networking solutions. There has been a lot of talk about the company’s second-quarter earnings report in recent days, largely due to production delays for new Blackwell chips that the company is marketing as a game changer for AI data centers. Chip experts have dismissed concerns about the hiccup, however, noting that demand for the H200 will more than offset any Blackwell production delays. NVIDIA claims that Blackwell shipments will begin late this year and ramp up to the first quarter of 2025.
Wall Street analysts have been keeping a close eye on NVIDIA Corporation (NASDAQ:NVDA) ahead of its second-quarter earnings report. Morgan Stanley has an Overweight rating on the stock with a $144 price target. In a recent investor note, analyst Joseph Moore said the advisory firm expected first volumes from Blackwell in the October quarter, given that its first product was functional but with slightly lower yields, and still expected volume growth from the next silicon revision through January — all of which was still within the broad brush strokes of its guidance.
In general, NVDA is in 1st place on our list of trending AI stocks based on the latest analyst ratings and news. While we recognize the potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, our conviction is based on the belief that some AI stocks offer a better chance of delivering higher returns, and in a shorter time frame. If you're looking for an AI stock that shows more promise than NVIDIA but trades at less than 5x earnings, check out our report on the cheapest AI stocks.
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Disclosure: None. This article was originally published on Insider Monkey.
