Is NVIDIA Corp (NASDAQ:NVDA) an Overvalued AI Stock?

WhatsApp Group Join Now
Telegram Group Join Now
Instagram Group Join Now

We recently published a list. Top 10 AI Stocks Wall Street Analysts Are Upgrading. NVIDIA Corp (NASDAQ:NVDA) is third on the list. So the stock deserves a closer look.

There's been a lot of buzz about AI stock prices and how investors are overpaying for megacap tech stocks that promise something that's still in the future — productivity gains, real-life AI. Products and AGI. But the market doesn't seem to care what AI skeptics and naysayers believe. There seems to be no end to the AI-led gains in stocks. And analysts are expecting more. Goldman Sachs' Scott Rubner recently said he sees a “wall of money” heading into the market. Rubner pointed to the $7.3 trillion sitting in money market funds and said he believes the floodgates are about to open and investors will send that money into stocks. According to Rubner's model, the third quarter of 2024 is when we should expect billions ($29 billion, to be exact) to hit the market.

No one needs a crystal ball to know where all those billions will be taken. AI is the promising theme that everyone is betting on and that includes experts, billionaires, money managers and long-term value investors. Tom Lee, co-founder of Fundstreet Global Advisors, recently said on CNBC that investors have been “hesitant” for most of the year, but they should just stick to “what's working.” . According to Lee, AI, weight loss drugs and related topics are being worked on these days.


For this article we've selected the top AI stocks Wall Street analysts recently upgraded or commented bullish on. With each stock we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? 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 strategy selects 14 small-cap and large-cap stocks each 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 into a gaming computer.


Number of hedge fund investors: 186

NVIDIA Corp ( NASDAQ:NVDA ) has been getting a number of bullish calls from Wall Street lately. Bank of America recently added shares of NVIDIA Corp (NASDAQ:NVDA) to its US 1 list. The list includes BofA's best investment ideas, including trading buy-rated stocks in the US. NVIDIA Corp's (NASDAQ:NVDA) latest product announcements and plans at Computex show that NVIDIA Corp (NASDAQ:NVDA) has plenty in its arsenal to power its growth engine. there is something Analysts believe NVIDIA Corp's ( NASDAQ:NVDA ) has moved to a new AI architecture known as Rubin ( R100 ) and its powerful H100 and Blackwell chips could easily beat rivals.

NVIDIA Corp (NASDAQ:NVDA) will begin shipping the H200 in the second half of this year. At its GTC conference, NVIDIA Corp (NASDAQ:NVDA) revealed three accelerators – the B200, GB200 and GB200 NVL72. All of these products provide growth catalysts for NVIDIA Corp (NASDAQ:NVDA) shares, and with NVIDIA Corp (NASDAQ:NVDA) expected to grow more than 100% this year and 32% next year, its P /E multiples justify 71. Based on Wall Street's 2026 EPS estimates, NVIDIA Corp (NASDAQ:NVDA) is trading at a forward P/E multiple of 35.74, making the stock attractively valued given the growth catalysts it possesses. .

However, there are many other attractive opportunities in the AI ​​space. If you're looking for an AI stock that's more promising than NVIDIA but trades at less than 5 times its earnings, check out our report on it. Cheapest AI Stocks.

RiverPark Large Growth Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its first quarter 2024 investor letter:

NVIDIA Corporation (NASDAQ:NVDA): Shares of NVDA were our top contributors this quarter. The company reported quarterly revenue of $22.1 billion, up 265% year-over-year, and EPS for the quarter of $5.16, up 487% year-over-year and 12% ahead of expectations. Revenue guidance for 1Q of $24 billion was 8% above expectations. The artificial intelligence arms race, started by ChatGPT and Alphabet's Bard, has created strong demand for Nvidia's next-generation graphics processors.

NVDA is the leading designer of graphics processing units (GPU's) required for powerful computer processing. Over the past 20 years, the company has grown from a primarily gaming-focused chip vendor to one of the world's largest semiconductor/software vendors through innovation and adaptation. Over the past decade, the company has grown revenue at a compound annual rate of more than 20% while expanding operating margins and, through its asset-light business model, generating ever-increasing amounts of free cash flow. Following the recent results, NVIDIA founder and CEO Jensen Huang said in the company's press release, “One trillion dollars in installed global data center infrastructure will shift from general-purpose to high-speed computing as companies transform every product, service and I will race to implement generative AI into business processes.”

Overall, NVIDIA Corp (NASDAQ:NVDA) rating 3rd In the inner monkey list Analysts Are Upgrading These 10 AI Stocks. you can come Analysts Are Upgrading These 10 AI Stocks To see other AI stocks that are on analysts' radar. While we recognize NVDA's potential, we believe that under-the-radar AI stocks hold more promise to deliver higher returns, and do so in a shorter period of time. If you're looking for an AI stock that's more promising than NVIDIA but trades at less than 5 times its earnings, check out our report on it. Cheapest AI Stocks.

Read next: Michael Berry is selling this stock. And Jim Cramer is recommending this stock..

Disclosure: None. This article was originally published on Insider Monkey.

WhatsApp Group Join Now
Telegram Group Join Now
Instagram Group Join Now

Leave a Comment