We recently compiled a list of the 10 AI Stocks You Need to Watch: News & Ratings. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other AI stocks.

Nvidia’s annual software developer conference, GTC, is in full swing. With its latest announcements, the company is doing all it can to assure investors of its dominance in the rapidly evolving artificial intelligence industry. On Tuesday, CEO Jensen Huang delivered a keynote address in front of a packed hockey stadium in San Jose, California.

He noted how he believes that humanoid robots are less than five years away from wide use in manufacturing facilities. In this regard, he unveiled software tools that would reportedly help humanoid robots navigate the world more easily. Huang talked about humanoid robots when asked what signs would show that AI had become ubiquitous.

Huang said it may be “when, literally, humanoid robots are wandering around, which is not five years away. This is not five-years-away problem, this is a few-years-away problem.”

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Huang asserted that the manufacturing industry is probably going to be the first to adopt humanoid robots. This is because it has well-defined tasks that robots can easily handle in a controlled environment.

“I think it ought to go to factories first. And the reason for that is because the domain is much more guard-railed, and the use case is much more specific. The value of it is very, very easy to determine. The going rate for renting a human robot is probably $100,000 and I think it’s pretty good economics.”

The chipmaker’s CEO reportedly has big plans for the AI data center industry too. Debuting silicon photonics networking systems, Huang noted that their Spectrum-X and Quantum-X photonics can join hundreds and even thousands of GPUs, enabling data center companies to deploy up to 1 million GPU clusters.

Huang further noted how those million cluster data centers will be connected to other million-dollar data centers nearby to form massive data center facilities.

“Over the next several years, we’re going to be building giant AI factories. Not normal AI factories … ones you see from space.”

The GTC keynote also talked about the company’s latest advancements, from Spectrum-X and Quantum-X photonics to Blackwell Ultra and Vera Rubin Superchips, which are going to help customers operate powerful AI systems to drive better revenue opportunities.

“AI factories are directly related to revenue, and if the throughput is not good, your revenue is hurt. If you don’t have enough capacity, your revenue is hurt. If you’re not producing something of great value … your revenue is hurt.”

For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.

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 Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 223

NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. With the GTC Conference in full gear, Nvidia has unveiled its latest NVIDIA Spectrum-X™ and NVIDIA Quantum-X silicon photonics networking switches. These switches are designed to enable AI factories to connect millions of GPUs across sites, all while significantly reducing energy consumption and operational costs.

NVIDIA photonics switches claim to be one of the world’s most advanced networking solutions, integrating optics innovations with 4x fewer lasers to deliver 3.5x more power efficiency, 63x greater signal integrity, 10x better network resiliency at scale, and 1.3x faster deployment when compared with traditional methods. The company’s silicon photonics ecosystem comprises big names such as TSMC, Browave, Coherent, Corning Incorporated, Fabrinet, Foxconn, Lumentum, SENKO, SPIL, Sumitomo Electric Industries and TFC Communication.

“AI factories are a new class of data centers with extreme scale, and networking infrastructure must be reinvented to keep pace. By integrating silicon photonics directly into switches, NVIDIA is shattering the old limitations of hyperscale and enterprise networks and opening the gate to million-GPU AI factories.”

-Jensen Huang, founder and CEO of NVIDIA.

Overall, NVDA ranks 4th on our list of  AI Stocks you need to watch. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some 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.

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