We recently published a list of Tariff Hits and More: 10 AI Stocks in the Spotlight. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other AI stocks in the spotlight.

The newly announced tariffs by U.S. President Donald Trump could have serious consequences for many stocks. The competitive landscape may also change, leading competitors to potentially gain an edge. In particular, investment firm Bernstein has warned of higher uncertainty and downside risk for semiconductor stocks after the new tariff plan. Even though chips remain safe for now, the firm has said that indirect consequences may be significant.

Besides the tariffs in question, another area of concern in the realm of AI is its future potential impact. Big tech firms may be racing ahead to win the AI arms race, but they are ignoring a major area of concern. According to the U.N. Trade and Development agency, the artificial intelligence industry is poised to reach $4.8 trillion in market value by 2033. However, its benefits are expected to remain highly concentrated.

The UNCTAD report reveals that the AI market cap would roughly equate to the size of Germany’s economy. However, there are significant concerns about automation and job displacement. The report warns that AI could affect 40% of jobs worldwide.

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To make matters worse, it has also revealed that artificial intelligence is not “inclusive,” which means that the benefits and economic gains from the technology tend to be “highly concentrated.”

“The benefits of AI-driven automation often favour capital over labour, which could widen inequality and reduce the competitive advantage of low-cost labour in developing economies.”

UNCTAD isn’t the only organization raising concerns over job displacement and income inequality stemming from the advent of AI. IMF has voiced similar concerns in the past, revealing how it may cause polarization within income brackets. Workers who can harness AI are probably going to witness an increase in their productivity and wages, and those who cannot will fall behind.

The report from the IMF revealed AI may impact 60% of advanced economies. In contrast, AI exposure is anticipated to be an estimated 40% and 26% in emerging markets and low-income economies. Overall, AI is expected to worsen income inequality over time. For this reason, it is important that policymakers address the issue proactively in order to protect the livelihoods of those who are vulnerable.

“History shows that new technologies can lead to great gains for our economies but are not without pain for some people and communities.  The overall impact will depend highly on social institutions and policies. Policies are needed to help workers adapt to the new reality and to ensure their participation in the benefits arising from technology.”

-Pingfan Hong, Director of DPAD.

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. One of the biggest analyst calls on Thursday, April 3rd, was for Nvidia Corporation. HSBC analyst Frank Lee downgraded shares to “Hold” from buy and cut his price target by $55 to $120 based on limited upside potential.

“We expect Nvidia to deliver YoY sales growth of 62% and EPS growth of 58% in FY26e, while the current FY26e [price-to-earnings ratio] of 23x also does not look demanding to us. However, we now expect to see limited upside potential going forward given limited room for significant earnings upside surprise over the next 1-2 years and potential re-rating headwinds that we think are yet to be fully factored in by the market.”

The advent of Chinese AI startup DeepSeek had pressured the stock earlier which has been lagging the broader market ever since.

“We first upgraded Nvidia to Buy in April 2023 on the back of Nvidia’s strong AI GPU pricing power and product mix being underestimated by the market that we believe has continued for past two years,” he wrote. “However, we now think Nvidia’s GPU pricing power is slowing down as we have seen no significant ASP boost between B200 and B300 GPU or the GB200 and GB300 NVL72 rack architecture.”

Overall, NVDA ranks 5th on our list of AI stocks in the spotlight.. 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. 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.

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