We recently released a list highlighting 10 AI stocks poised for substantial growth. This article focuses on NVIDIA Corporation (NASDAQ:NVDA) and compares its positioning to other promising AI stocks.
Artificial Intelligence (AI) has transitioned from a buzzword to an integral part of daily life, impacting everything from applications to business operations. This evolution presents ample investment opportunities. As the AI sector expands, several companies are at the forefront, showcasing strong potential for long-term returns. For those looking to diversify or invest in the technology of the future, this article outlines notable AI stocks worth following. AI stocks have seen remarkable growth, particularly in 2024, but recent geopolitical tensions have caused a dip, creating a favorable environment for potential investments.
In a CNBC interview, Cathie Wood, CEO and CIO of Ark Invest, expressed her strong belief in the AI sector despite its recent decline. Wood emphasized that AI’s growth potential resembles the internet’s early days in the 1990s. She is particularly optimistic about the near-term impact of robotaxis and the long-term integration of humanoid robots. However, she believes healthcare represents the most underestimated application of AI, projecting that AI could significantly expedite disease treatment. Wood is especially positive about sequencing technology, which interprets DNA, as AI enhances the speed and accuracy of genetic data analysis.
Currently, Generative AI is a particularly hot topic. This technology provides tailored responses to users based on real data, sparking an investment surge exceeding $200 billion annually, driven by the ‘magnificent seven’ tech giants. These companies are fiercely vying for dominance in the Generative AI space. Additionally, a new trend is emerging around large language models (LLMs). As per Morgan Stanley, firms behind the most advanced LLMs are prioritizing high-performance chips and superior software, making these AI solutions vital for both businesses and consumers. While initial LLM applications focused on content creation and categorization, industry leaders see untapped potential in employing AI reasoning for enterprise data analytics.
To identify the AI stocks anticipated to soar, we analyzed AI ETFs to compile an initial list and selected those with the highest growth potential based on Wall Street analysts’ price targets. We also considered hedge fund sentiment regarding each stock as of Q4 2024.
At Insider Monkey, we focus heavily on stocks favored by hedge funds because our research indicates that mimicking the best hedge fund stock choices can lead to market outperformance. Our quarterly newsletter employs a strategy that selects 14 small-cap and large-cap stocks each quarter and has achieved a 373.4% return since May 2014, significantly surpassing its benchmark by 218 percentage points.
NVIDIA Corporation (NASDAQ:NVDA) is a leader in accelerated computing, delivering a comprehensive platform that includes GPUs, software, and development tools. The company’s innovations foster advancements in AI, data processing, and 3D visualization across multiple industries. Over 75% of the world’s leading supercomputers utilize NVIDIA’s GPUs, which are critical for powering AI technologies like deep learning. Although recent U.S. export restrictions affecting its H20 series products might impact approximately $5.5 billion in revenue, Mizuho Securities maintains an “Outperform” rating for NVIDIA, predicting strong growth driven by the new GB200 line and continued investment in AI for the coming years. Overall, NVDA ranks second in our list of AI stocks expected to surge, highlighting its substantial growth potential within the AI sector.
