We recently published a list of the 12 Best Stocks Under $100 to Buy According to Hedge Funds. In this article, we are going to take a look at where NVIDIA Corp. (NASDAQ:NVDA) stands against other stocks under $100 to buy according to hedge funds.

On April 21, Chris Davis of Davis Advisors appeared on ‘The Exchange’ on CNBC to talk about selectivity in today’s market. Davis pointed out that putting companies in groups like the MAG7 covers their underlying businesses, which can have different fundamentals and therefore prospects. For this reason, he acknowledged that he owns certain stocks from MAG7 but not all. Davis also clarified that his overall focus is on value and growth, which leads him to a diverse set of holdings and not just tech, such as financials and healthcare names. He then argued that the market is shifting back toward selectivity and active management. He suggested that active management is positioned for a resurgence because the indexes have become highly concentrated and richly valued.

Davis acknowledged that while he cannot predict the market’s short-term movements, the present environment is ideal for stock pickers who can identify resilient businesses that are trading at reasonable valuations. He sees this as an opportunity for active management to outperform, as investors move away from momentum-driven index investing toward a more selective approach. He noted the growing popularity of actively managed ETFs as evidence that investors are beginning to act on this shift away from index concentration. He also believes that within the MAG7, only a few companies are truly well-positioned. Similarly, within the S&P 500, only 5% to 10% of companies possess the resiliency and durability needed for such volatile times.

Davis laid out what he sees as the major transitions shaping the current investment environment. First, he described the shift from nearly 15 years of free money to a more normal interest rate environment. Second, he pointed to the end of a multi-decade era of globalization, which was replaced by deglobalization, rising nationalism, and geopolitical tensions. Third, he highlighted the impact of AI. He said that these transitions are occurring against a backdrop of market complacency, with high valuations and concentrated growth expectations.

Our Methodology

We first used the Finviz stock screener to compile a list of the top stocks that were trading under $100 as of April 22. We then selected the 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 1000 elite money managers.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

NVIDIA Corp. (NASDAQ:NVDA)

Share Price as of April 22: $96.91

Number of Hedge Fund Holders: 223

NVIDIA Corp. (NASDAQ:NVDA) is a computing infrastructure company that provides graphics and compute & networking solutions. Its products are used in gaming, professional visualization, data centers, and automotive markets. It sells its products to several customers, which include OEMs, original device manufacturers, system integrators & distributors, and independent software vendors.

NVIDIA’s Data Center segment made a record $35.6 billion in revenue in FQ4 2024, which was up 93% year-over-year. The Blackwell revenue totaled $11 billion in this quarter, which marked the fastest product ramp in the company’s history. However, Argus lowered the stock’s price target to $150 from $175 with a Buy rating on April 17. The firm believes that the fresh US licensing requirements for AI chip exports, which include NVIDIA’s H20 models, will impact quarterly earnings by as much as $55 billion.

NVIDIA Corporation (NASDAQ:NVDA) is positioned for continued growth, driven by its leadership in AI infrastructure, data center solutions, and gaming technology. NVIDIA’s revenue has more than doubled in each of the last two fiscal years. Its bargaining power is evident in its operating margin, which has expanded to 62.4% in 2024.

Guinness Global Innovators is highly bullish on NVIDIA Corp. (NASDAQ:NVDA) due to its dominant AI chip market position. It stated the following in its Q4 2024 investor letter:

“For a second year running, NVIDIA Corporation (NASDAQ:NVDA) was the Fund’s top performing stock, delivering a stellar return of +177.7% over the year. Since the beginning of last year, Nvidia’s ‘Hopper’ GPUs have been at the centre of exploding demand for chips powerful and efficient enough to facilitate the energy intensive requirements of AI processes within datacentres. Initially possessing over 95% of market share in these types of chips, Nvidia have been quick to entrench their position as the technological leader in the space, launching the successor to the current ‘Hopper’ GPU in March, Blackwell, inhibiting the likes of AMD and Intel making meaningful inroads in taking share of the fast-growing market. Compared to the previous iteration (Hopper) which is continuing to fuel Nvidia’s extreme revenue growth, the Blackwell chip is twice as powerful for training AI models and has 5 times the capability when it comes to “inference” (the speed at which AI models respond to queries). Throughout the year, Nvidia’s financial performance has remained resilient. Quarterly revenues hit $35.1 billion in their most recent quarter, beating consensus expectations by 6% and representing a +94% year-over-year increase. Additionally, Nvidia’s data centre segment, driven by the Hopper (H100) chip, grew fivefold over the past year, underscoring the sustained demand for advanced AI infrastructure. The H100 chip, priced at around $40,000, continues to see significant adoption due to its ability to enhance AI model training efficiency while lowering overall costs. This growth is expected to continue as companies invest in upgrading existing data centres and building new ones, with Nvidia well-positioned to capture a significant share of the estimated $2 trillion market opportunity over the next five years. There have been some concerns over Blackwell production delays causing share price volatility however, Nvidia has recovered swiftly, driven by positive earnings results through the year and assurances from management regarding future supply. Additionally, the release of the H200 chip promises to extend Nvidia’s technological leadership, ensuring continued momentum into 2025. While Nvidia’s valuation remains a topic of debate, the stock is not at a significant premium to history, and it still appears reasonable given its dominant market position, innovative prowess, and exposure to long-term secular growth trends in AI, cloud computing, and data infrastructure. As a result, Nvidia remains well-positioned to deliver sustained outperformance over the long term, making it a cornerstone of growth-oriented portfolios.”

Overall, NVDA ranks 1st on our list of the best stocks under $100 to buy according to hedge funds. While we acknowledge the growth potential of NVDA, our conviction lies in the belief that AI stocks hold great promise for delivering high 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 the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.