1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Investors: 193
Ivan Feinseth from Tigress Financial said while talking to Schwab Network that NVIDIA Corporation (NASDAQ:NVDA) rivals cannot catch up to it because the company is always far ahead of them:
“I think the tech sector will continue to lead the market higher, and collectively it is companies like Nvidia. And Nvidia has—you know, nobody is going to catch Nvidia. Every time somebody else, whether it’s Huawei, AMD, anybody else, comes up with their newest GPU, Nvidia is already way ahead. They have the, um, Blackwell Ultra coming out in the second half of this year. They got, um, a new processor coming out in 26 and 27. They are so far ahead of everybody else. And for the most important inferences and AI platforms and applications, you’re going to want to run the fastest and best chip because—processor—because that gives everybody their competitive advantage. Remember, all these companies are competing on this AI front, and they’re not going to cut costs because cutting costs could risk their leadership or position or competitive advantage.”
Nvidia is facing challenges at several levels. Competition is one of them. Major competitors like Apple, Qualcomm, and AMD are vying for TSMC’s 3nm capacity, which could limit Nvidia’s access to these chips. Why? Because Nvidia also uses TSMC’s 3nm process nodes. Nvidia is also facing direct competition from other giants that are deciding to make their own chips. Amazon, with its Trainium2 AI chips, offers alternatives. Trainium2 chips could provide cost savings and superior computational power, which could shift AI workloads away from Nvidia’s offerings. Apple is reportedly working with Broadcom to develop an AI server processor. Intel is also trying hard to get back into the game with Jaguar Shores GPU, set to be produced on its 18A or 14A node.
Ithaka US Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2025 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is the undisputed leader in accelerated computing, with dominant market share in Graphics Processing Units (GPUs) powering AI workloads across data centers, edge devices, and emerging platforms. Its end-to-end ecosystem—from silicon to software (CUDA, networking, and AI frameworks)—creates high switching costs and a widening competitive moat. With secular demand for AI infrastructure still in its early innings, Nvidia stands to benefit from sustained topline growth and strong operating leverage. In early January, a little known Chinese AI company, DeepSeek, released its large language model (LLM), DeepSeek-R1, to an unexpecting world. This model was purportedly trained on very few high-end Nvidia chips and was highly efficient when compared to other leading models. This release set off a chain reaction where investors have had to grapple with the idea that the world may not need as many GPUs as previously thought, which hampered the Nvidia buy case and sent the P/E multiple down to its cheapest level in the past 5 years.”
While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, our conviction lies in the belief that under-the-radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
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