We recently published a list of the 20 AI news stories and analyst ratings you can’t miss. In this article, we’ll look at how NVIDIA Corporation (NASDAQ:NVDA) stands against other can’t-miss AI news stories and analyst ratings.
The artificial intelligence (AI) market continues to show tremendous growth, with significant advancements being made across various sectors. According to a McKinsey report on the AI industry, the AI revolution is driving innovation across industries, and investments in AI have increased seven-fold in recent years, despite the economic downturn in other technology sectors. This surge is primarily driven by the growing demand for AI applications in data analytics, content generation, and predictive modeling. In particular, generative AI has attracted the most attention, revolutionizing industries such as marketing, customer service, and product design. Moreover, high-performing companies are investing heavily in AI to gain competitive advantage. Often referred to as AI high performers, these companies are allocating a significant portion of their digital budgets (20% or more) to AI technologies. They are prioritizing AI not only for cost savings but also for new revenue streams.
For more on these trends, check out “The 33 Most Important AI Companies to Watch” and “20 Industrial Stocks Already Riding the AI Wave.”
The market for AI applications is expected to grow even further, with several industry reports predicting that AI could contribute up to $13 trillion to the global economy by 2030. An informed estimate by Goldman Sachs investment advisors suggests that over the next decade, these AI tools could increase global GDP by 7%, worth about $7 trillion, and boost productivity growth by an overall 1.5 percentage points. Additionally, the bank expects leading companies around the world to spend about $1 trillion on developing AI infrastructure in the coming years.
Well-known companies are also taking notice of these trends. According to the latest reports, investment giant BlackRock is expected to partner with technology giants to launch a $30 billion+ fund focused on AI. The fund will invest in artificial intelligence infrastructure to build data centers and energy projects. AI models require significant computing power, which increases energy consumption, making energy needs a particular concern for the business world.
The sheer scale of computing power required for AI workloads is forcing tech giants to build supercomputer clusters that combine expensive chips, cooling systems, networking tools, and other high-tech equipment to process the data. As AI use cases expand, the energy consumption of these AI data centers is likely to increase. McKinsey predicts that 15% to 20% of total data center workloads will be AI-driven by 2025, compared to less than 5% in 2020. Moreover, an International Energy Agency report suggests that if current growth trends continue, AI data centers could account for 13% of global electricity demand by 2030. Tech giants are investing billions of dollars in expanding their AI infrastructure.
Our Methodology
In this article, we have selected AI stocks based on the latest news and analyst ratings, and these stocks are also popular among hedge funds.
Why are we interested in hedge fund concentrated stocks? The reason is simple: our research shows that you can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small and large stocks each quarter, and has returned 275% since May 2014, beating the benchmark by 150 percentage points (more details here).
Close-up of a colorful high-end graphics card plugged into a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA)
Number of hedge fund holders: 179
NVIDIA Corporation (NASDAQ:NVDA) offers graphics, computing, and networking solutions. According to the latest reports, the chip company has partnered with United Arab Emirates-based AI company G42 for the advancement of climate technology. The collaboration will focus on developing AI solutions aimed at improving the accuracy of weather forecasts globally. According to the two companies, the deal will see a new operational base established in Abu Dhabi, along with the establishment of a research and development hub, the Climate Tech Lab. The facility will also drive the creation of customized climate and weather solutions using over 100 petabytes of geophysical data assets.
William Blair analyst Sebastian Nagy recently initiated coverage on NVIDIA Corporation (NASDAQ:NVDA) shares with an Outperform rating. In a research note, the analyst noted that NVIDIA has a long history of designing parallel computing systems to handle complex processing tasks, and this history has helped the chip company position itself as a leader in niche markets such as gaming, automotive, visualization, and high-performance computing (HPC). However, Nagy said the rise of AI has propelled parallel computing to the forefront of the tech industry, causing a surge in demand for the company’s GPUs and parallel computing stack.
Overall, NVDA ranks #1 on our list of can’t-miss AI news and analyst ratings. While we acknowledge NVDA’s potential as an investment, we believe some AI stocks have the potential to deliver higher returns in a shorter time frame. If you’re looking for AI stocks that are more promising than NVDA but still trade for less than 5x its earnings, check out our report on the cheapest AI stocks.
Read next: The $30 Trillion Opportunity: The 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and NVIDIA Has “Become a Wasteland” According to Jim Cramer.
Disclosures: None. This article was originally published on Insider Monkey.
