We recently published a list of 10 Best Major Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other best major stocks to buy according to hedge funds.
After a notable growth of 25% for the broader market in 2024, the S&P 500 index gained a little under 4% in the first month of 2025. The stock market had a mixed start to 2025 after the U.S. tech companies took a massive hit from the launch of Deepseek’s R1 AI model. Despite a major blow, the tech-heavy NASDAQ 100 index has gained over 4.50% year-to-date.
READ ALSO: 10 Large-Cap Stocks Insiders Are Selling Recently
Inflation and Tariff Concerns
U.S. stocks fell on February 12 following the release of January inflation data. The consumer-price index (CPI) soared 3% in January from a year ago, exceeding economists’ estimates. The data has somewhat stoked investors’ concerns about price pressures and the worry that interest rates might not come down as expected.
January CPI usually indicates big price adjustments made by businesses at the start of the year. Moreover, the beginning of a new administration has an impact on businesses. According to Goldman Sachs Research’s chief US equity strategist David Kostin, every five-percentage-point increase in the US tariff rate is estimated to reduce S&P 500 EPS by roughly 1-2%.
Therefore, if the U.S. administration sustains the proposed tariff rates, a 25% tariff on imported goods from Mexico and Canada and an additional 10% tariff on imports from China would reduce S&P 500 EPS forecasts by nearly 2-3%, as per Goldman’s Research.
However, the tariff policy doesn’t slow down the AI investment by the U.S. tech giants as they continue to expand their AI-related services and products. Four out of the Big Five companies are projected to invest over $300 billion in 2025 building data centers to fuel the AI boom.
Our Methodology
We have listed the top 10 best major stocks based on hedge fund sentiment, according to Insider Monkey’s database. The best major stocks are ranked in ascending order of the number of hedge fund holders, as of Q3 2024.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA)
No. of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) is the leading GPU manufacturer and produces high-end units that are widely used in AI. The chipmaker has also entered the robotics segment with continuous development of its Isaac™ robotics platform. This platform supports application in research, development, and production of the next generation of Al-enabled autonomous machines and robots. Companies such as BYD Electronics, Siemens, Teradyne Robotics, and Intrinsic, are using the NVIDIA Isaac Robotics Platform for autonomous robot arms, humanoids, and mobile robots. However, the company’s GPU segment remains the core business amid increasing demand from AI companies.
On January 28, Morgan Stanley analyst Joseph Moore lowered its price target on NVDA shares from $166 to $152, maintaining an Overweight rating. Moore pointed out that DeepSeek’s R1 AI model could introduce cost-reducing innovations in AI, which may impact NVIDIA. Although analysts have lowered the price target on NVDA, they are still optimistic about the company’s strong position in the semiconductor market and its dominance in the AI sector. Tigress Financial analyst Ivan Feinseth has raised the price target of NVDA shares from $170 to $220, upgrading the rating from Buy to Strong Buy. Feinseth anticipates the company’s growing leadership in AI as a main catalyst for revenue expansion.
In the long term, NVIDIA remains a top stock and can be a good buy considering the recent drop in its price. The rising demand for data centres and AI will continue to drive the demand for NVIDIA’s GPUs.
Overall, NVDA ranks 5th on our list of best major stocks to buy according to hedge funds. While we acknowledge the potential of NVDA to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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 Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
Hedge Fund Resource Center