We recently published a list of the 10 best stocks to buy and hold for five years. In this article, we’ll take a look at how NVIDIA Corporation (NASDAQ:NVDA) stands compared to other stocks that are best to buy and hold for five years.
On Nov. 7, Reuters reported that U.S. stocks rose more than usual after the Federal Reserve announced a 25 basis point interest rate cut, with gains fueled by the election results and extending gains. The Fed’s decision came just after the job market showed signs of easing and inflation moved toward the central bank’s 2% target. Most investors expected the new administration to ease taxes and regulations, all of which helped lift all three major indexes. The S&P 500 and Dow each posted their biggest one-day gains in two years.
Now that the election is over, investors want to know how the market will perform amid the election results. On November 8, Vanity Fair contributing editor Bethany McLean joined Yahoo Finance’s Catalyst to discuss why businesses are feeling optimistic as a new president takes the White House.
MacLean emphasizes that investors foresee a myriad of benefits, including extended tax cuts, reduced regulation, and less antitrust scrutiny, all of which are driving the market’s surge. Despite the potential benefits, she stresses that it’s difficult to predict what the administration will do at this point.
MacLean hopes the new administration will be friendlier to technology companies, but remains determined to see how policy develops. He added that he expects a “reversal” if future policies by the new administration have a negative impact on the stock market.
On the other hand, some analysts argue that the easing cycle has a bigger impact on the stock market than the election, suggesting that the name of value may be more important at this point. On November 7, Arup Datta, Senior Vice President at Mackenzie Global Quantitative, joined Wealth. He will be sharing his market theory on Yahoo Finance as the 2024 election approaches.
Dutta shares that he is very positive about the market, but emphasizes that this victory will have little impact on financial markets in the long run. Speaking about the great 7 companies, he added that focusing on quality stocks with positive growth and value in your investment portfolio will help you navigate the market in these situations.
He hinted that the great seven have been the talk of the town for the past 18 to 21 months, but he wants to “switch things around” a bit. Historically, value stocks have performed better during easing cycles, Dutta added.
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Near-term markets are likely to remain volatile as the new administration settles in and the Fed begins its second rate cut of the cycle. Looking to the future, several companies are promising long-term growth with their own innovative technologies and significant investments.
To come up with the 10 best stocks to buy and hold for five years, we looked at multiple similar rankings to create an initial list of 20 stocks. We then ranked the top 10 based on hedge fund sentiment at the end of Q2 2024.
Why are we interested in stocks that hedge funds invest in? The reason is simple. Our research shows that by mimicking the top stock picks of the best hedge funds, you can outperform the market. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, outperforming the benchmark by 150 percentage points (Learn more ).
Is NVIDIA Corporation (NVDA) the best stock to buy and hold for 5 years?
Photo by Christian Wiediger on Unsplash
Number of hedge fund holders: 179
NVIDIA Corporation (NASDAQ:NVDA) ranks #3 on our list of the best stocks to buy and hold for five years. NVIDIA is a leading GPU manufacturer driving innovation in artificial intelligence, gaming, creative design, self-driving cars, and robotics.
There’s no doubt about NVIDIA’s position in the technology and AI space. As part of its recent updates, the company announced its Enterprise Reference Architecture on October 29th. These blueprints will help the company’s partners and customers build AI factories. Most recently, on November 6th, NVIDIA Corporation (NASDAQ:NVDA) partnered with Hugging Face to accelerate research and development in open source AI robotics.
NVIDIA Corporation (NASDAQ:NVDA) is scheduled to report its earnings results later this month, on November 20, 2024. In light of the long-awaited earnings release, Bank of America analyst Vivek Arya appeared on CNBC on October 19 to defend his case. A bullish call for NVDA. Calling the stock a “generational opportunity,” Arya noted that NVDA’s stock price is less than 1x earnings growth, far lower than other stocks included in the Great Seven. emphasized. He praised NVDA’s large ecosystem that encompasses “end-to-end” knowledge, suggesting it is ahead of its competitors.
Overall, NVIDIA Corporation (NASDAQ:NVDA) makes our list because of its resources and expertise in scalable AI hardware and software solutions. According to Insider Monkey’s database, 179 hedge funds were bullish on the stock at the end of Q2 2024.
The Ithaka Group’s Ithaka US Growth Strategy said the following about NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is a market leader in visual computing through the production of high-performance graphics processing units (GPUs).The company serves four major growth markets: gaming, professional visualization, data center, and automotive. NVIDIA’s products are targeted at data center acceleration and artificial intelligence. Generative AI has the potential to lead and disrupt some of the most exciting areas of computing, including AI, machine learning, and autonomous driving. Second, the stock benefited from a lot of excitement surrounding further developments and the possibility that this would require purchasing large amounts of Nvidia products in the distant future.Nvidia also had a beat(1) and raise quarter. Recording strong performance, 2025 We exceeded market expectations for our second quarter revenue guidance, demonstrating our leadership in building today’s accelerated computing infrastructure.”
Overall, NVDA ranks #3 on our list of the best stocks to buy and hold for five years. While we acknowledge that NVDA has growth potential, we believe certain AI stocks are more likely to deliver higher returns and do so in a shorter time frame. If you’re looking for AI stocks with more promise than NVDA, but trading at less than 5x earnings, check out our report on the cheapest AI stocks.
Read next: 8 Best Widemot Stocks to Buy Now and 30 Most Important AI Stocks, According to BlackRock
Disclosure: None. This article was originally published on Insider Monkey.
