We recently compiled a list of the 15 AI news investors shouldn’t miss.In this article, we’ll take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands compared to the other AI stocks investors shouldn’t miss.
Developments in the field of artificial intelligence are making the news in various sectors. From high-profile legal battles to groundbreaking improvements in model performance and security protocols, AI is reshaping the landscape across industries at an unprecedented pace.
READ ALSO: 15 AI News Investors Shouldn’t Miss and 20 Trending AI Stocks on Latest News and Reviews
Before we move on to the latest AI news, let’s first talk about: Morningstar’s recent report. The investment research firm reveals that for the third consecutive year, investors are abandoning exchange-traded funds related to specific themes for funds tied to broad stock market benchmarks “at record highs.” Despite the overall growth in the number of equity ETFs, thematic ETFs will have lost $5.8 billion in investor capital by 2024. This is more than the $4.8 billion outflow in all of 2023. The reason? Broad market index returns are raising the bar for thematic funds this year.
“It’s not that people no longer like the idea of themes, but that a bull market dominated by a handful of megacaps makes it difficult for any theme to stand out.”
According to Morningstar, thematic ETFs often struggle due to mistimed investments, with investors typically missing out on two-thirds of their returns. Although some AI-themed funds have strong holdings, higher fees and timing issues reduce their overall appeal.
“I think once the S&P 500 mega-caps stop performing the way they are, the focus will shift back to thematic ETFs.”
Furthermore, while AI remains a key focus in many thematic ETFs, its impact goes far beyond investing. Take Penguin Random House, the first of the Big Five English-language trade publishers to change its copyright information. The publisher recently added language to its copyright pages to prohibit the use of those books to train AI. Publishers and AI companies will increasingly clash in the future if clear guidelines and processes are not in place. In a similar effort, The New York Times has sent Perplexity AI, an AI-powered research firm, a “cease and desist” notice demanding it stop using the newspaper’s content for generative AI purposes. The news publisher claims that the way the AI Company uses its material violates copyright law.
In other news, Anthropic, a US-based artificial intelligence startup, is now adding a comprehensive update to its security policies, strengthening the guardrails of its AI as it becomes more capable. This drive to improve AI security is in stark contrast to competitors like OpenAI, whose increasing focus on improving capabilities and performance will most likely threaten security guidelines in the future. According to McKinsey, 63% of companies consider inaccuracy risk to be relevant. However, only 38% of companies are doing everything they can to limit the risk.
While artificial intelligence may be intimidating, it is just as, if not more, beneficial to humanity. In its latest achievement, AI has helped UCLA researchers develop a deep learning framework that teaches itself to automatically analyze and diagnose MRIs and other 3D medical images. That too, with an accuracy that matches that of medical specialists in a fraction of the time. A new breakthrough from Archetype AI, a physical AI company, will significantly change the way we understand and interact with the physical world. The model, called Newton, shows the unparalleled ability to generalize about various physical phenomena using only raw sensor measurements as input.
Finally, in our round-up of the latest AI news, U.S. rules that will ban certain U.S. investments in artificial intelligence in China are in final review, according to a government release. The rules, which require U.S. investors to notify the Treasury Department of certain investments in AI and other tribal technologies, stem from an executive order signed by President Joe Biden in August 2023. The order is intended to prevent the knowledge of American investors are helping the Chinese military. . Chipmakers and related companies potentially affected by the decisions did not respond to Reuters requests for comment.
Methodology
For this article, we selected AI stocks by combining news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds invest in? The reason is simple: our research shows that we can outperform the market by imitating the best stock picks from the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, beating the benchmark by 150 percentage points (see more details here).
A close-up of a colorful, high-end graphics card plugging into a gaming console.
Number of hedge fund holders: 179
NVIDIA Corporation (NASDAQ:NVDA) is a global technology company developing the most advanced chips, systems and software for the AI factories of the future. The company is said to represent “the dominant” infrastructure player behind the current rise of the AI sector.
Wall Street is buzzing with excitement about NVIDIA Corporation’s (NASDAQ:NVDA) new AI chip, Blackwell. Industry analysts are excited about the company’s potential big upside in the fourth quarter, with all of Blackwell’s initial rush. On October 18, Ram Ahluwalia, CEO of Lumida Wealth Management, discussed the status of NVIDIA Corporation (NASDAQ:NVDA) on Yahoo Finance’s Catalysts.
According to Lumida’s CEO, the company is still in the “early innings” and expects Nvidia shares to reach $150 between now and the end of the year. With the hyperscalers looking to spend between $50 billion and $100 billion each on GPU computing, NVIDIA Corporation (NASDAQ:NVDA) will be the primary beneficiary, he says. Lumidia’s CEO further noted that the company is in a class of its own and has no “close competitor.” There is growing confidence that the chip giant will be the first tech company to reach a valuation of $4 trillion.
“We called for Nvidia to be the most valuable company in the world earlier this year. It reached that milestone yesterday and demand for GPU chips is high. And you’re seeing companies starting to get some ROI (return on investment). ” ) on it from the early adopters”.
On Friday, October 18, Bank of America analyst Vivek Arya reiterated his ‘Buy’ rating on the stock and raised his price target by $25 to $190. From the third-quarter results of Taiwan Semiconductor (one of Nvidia’s top suppliers) to the “insane” demand for Blackwell chips as quoted by Nvidia CEO Jensen Huang, the analyst believes recent industry trends have the potential to expand the lead of the company and increase generational opportunities. Furthermore, ‘undervalued’ corporate partnerships with companies are also a catalyst for greater growth.
“We also emphasize a growing presence of AI in enterprises, with NVDA being the partner of choice (more on page 10).”
According to the bank’s forecast, the market for AI technology will grow from $45 billion in 2023 to $117 billion this year, with Nvidia retaining a 75% market share, which translated into a whopping $272 billion in AI revenues computing for Nvidia by 2030. Arya also believes the company could generate at least $200 billion in free cash flow over the next two years.
In short, NVDA is in 3rd place on our list of AI stocks investors shouldn’t miss. While we recognize NVDA’s potential as an investment, our belief lies in the belief that some AI stocks hold greater promise for delivering higher returns in a shorter time frame. If you’re looking for an AI stock that’s more promising than NVDA but trades at less than five times earnings, check out our report on the cheapest AI stock.
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Disclosure: None. This article was originally published on Insider Monkey.
