We recently compiled a list of the 10 best artificial intelligence (AI) stocks to buy as recommended by financial media. In this article, we'll look at how NVIDIA Corporation (NASDAQ:NVDA) stands relative to other artificial intelligence stocks recommended by financial media.
CEO says AI will “continue to deliver value”
Artificial intelligence (AI) is a technology that is increasingly familiar to most people today. From the ads we see on social media apps to the self-driving cars that many consumers are moving towards, AI permeates nearly every aspect of life. It is no exaggeration to say that AI has become part of everyday life for anyone who uses technology today. Given the widespread use and applications of AI technology, this market segment is an attractive area to invest in today.
With the recent release of earnings from major technology companies, many investors are wondering what role AI will play in today's technology market and how it will continue to evolve. On August 2nd, Databricks CEO Ali Ghodsi appeared on CNBC's “The Exchange” to discuss this very development. Below are some of his comments:
“I think there are two things happening right now. One is the macroeconomics. The macroeconomics has been unstable for a long time, but it seems to be coming to an end now. You can see that in the job market, you can see that in inflation, you can see that in the 10-year Treasury yield falling. The other thing is AI. People are very excited about it. They know that AI is going to change the whole world, and the hyperscalers are investing huge amounts in it. But as a company we've been investing in data and AI for 10 years, and the revenues have grown steadily, and customers are getting value from it. But there's been a huge infusion of capital. I think AI is going to be great. It's going to continue to provide value.”
Ghodshi's comments clearly indicate the market's current view on AI: it is a technology area that cannot be ignored and must be invested in to the fullest extent. However, given this market view, many investors may be beginning to wonder whether the huge investments being made in AI are justified or whether it is merely what some have called an “AI bubble” that is sure to burst. However, given the enormous value found in AI, many investors believe that such a large investment of capital is indeed justified.
West Coast Smartphone Giant: AI Stock or Not?
Given the above, it is not surprising that several major technology companies are in the race to invest in and develop AI technology. However, there is one notable absence in most of the lists of best AI stocks to buy compiled by financial media reporters: Apple. Many investors are waking up to the fact that Apple is lagging behind other major technology companies that are rapidly developing AI technology. On August 6, Walter Piecyk of Lightshed Partners shared his views on the smartphone maker's AI efforts on CNBC's “Squawk Box.”
“I'm signed up as a developer on the latest development or latest release of iOS 18. I've been using the Intelligent Series and it's not been great…There's obviously going to be a lot of work going on between now and when this is officially released. I don't see it having a big impact this year and next year.”
Investors may be better off shifting to more pure AI investments. For this reason, we have compiled a list of the best AI stocks to buy recommended by financial media, providing insight into which companies are actually succeeding in the AI field right now. Our list also includes analyst-recommended best AI stocks to buy, as well as companies that offer the best AI SEO tools in 2024.
Our Methodology
We selected AI stocks that appeared on top AI stock lists from various financial news reporters, including Forbes, Motley Fool, Nasdaq, US News, NerdWallet, etc. We then used Insider Monkey's Q1 2024 hedge fund data to shortlist and rank the stocks based on the number of hedge funds holding the stock, from least to most.
Why are we interested in stocks that hedge funds are concentrated in? The reason is simple: our research shows that you can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small and large stocks each quarter and has returned 275% since May 2014, beating the benchmark by 150 percentage points. (Learn more here)
Close-up of a colorful high-end graphics card plugged into a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA)
Number of hedge fund holders: 186
NVIDIA Corporation (NASDAQ:NVDA) is a semiconductor company headquartered in Santa Clara, California. The company is best known for its graphics cards and microchips for self-driving cars and AI applications. According to US News, NVIDIA Corporation (NASDAQ:NVDA)'s foray into the AI field is one of the main reasons behind the company's impressive performance over the past few years. Furthermore, Nasdaq estimates that NVIDIA Corporation (NASDAQ:NVDA) occupies around 70% to 95% of the AI chip market. Therefore, this stock is worth buying, especially considering the company's clear dominance in the AI field today.
NVIDIA Corporation (NASDAQ:NVDA) was among 186 hedge funds' 13F holdings in the first quarter, with total holdings of $48.3 billion.
Overall, NVDA ranks fifth on our list of best artificial intelligence stocks to buy recommended by financial media. Visit our list of the 10 best artificial intelligence (AI) stocks to buy recommended by financial media to see other artificial intelligence stocks that hedge funds are watching. While we recognize NVDA's potential as an investment, we believe AI stocks have a better chance of delivering higher returns in a shorter time frame. If you're looking for AI stocks that are more promising than NVDA but still trade for less than five times its earnings, check out our report on the cheapest AI stocks.
Read next: Analyst sees new $25 billion 'opportunity' in NVIDIA, Jim Cramer recommended these 10 stocks in June.
Disclosures: None. This article was originally published on Insider Monkey.
