Wall Street analysts are closely following this popular AI stock

We recently made a list 19 Most Popular AI Stocks Based on Latest Analyst Ratings and News. In this article, we’ll take a look at how NVIDIA Corporation (NASDAQ:NVDA) stacks up against other popular AI stocks.

Exciting new developments in AI have been pouring in over the past few days as the stock market recovers from a big tech sell-off. Some of the most popular ones involve electronics giant Apple, Microsoft-backed AI startup OpenAI and software company Adobe. Apple doubled down on its AI efforts with the release of macOS Sequoia, which integrates AI features designed to improve device performance and user experience. These AI improvements include real-time content generation and AI-powered privacy tools. As iPhone sales slow, Apple is turning to AI to revive interest in its devices, standing out in an increasingly competitive tech market.

For more information on these events, please access 30 Top AI Stocks According to BlackRock AND Artificial Intelligence News You Shouldn’t Miss.

On September 13, OpenAI released its highly anticipated Strawberry model, which aims to solve complex challenges in AI development, including more nuanced decision-making and language processing. This model is expected to expand OpenAI’s capabilities in both consumer tools and enterprise applications. Similarly, Adobe is also taking big steps with its Firefly AI video tools, which are set to debut in late 2024. These tools allow users to generate videos from text and images, offering features like Generative Extend to enhance existing videos. This positions Adobe at the forefront of generative AI for content creation, with a focus on commercial safety through the use of licensed datasets.

Looking ahead, Wall Street analysts are predicting significant revenue and profit growth for key players in the AI ​​space, particularly in semiconductor companies that power AI applications. NVIDIA, for example, is expected to post an impressive 27% annual revenue growth, outperforming both the semiconductor industry and the broader U.S. market. The chipmaker’s total revenue in 2025 is expected to be around $123 billion, with profits expected to increase by more than 24%. The upcoming Blackwell GPU architecture, which offers a 3.7x performance improvement over the previous version, is seen as a key AI growth driver for NVIDIA over the next few months.

For more information on these events, please access The 33 Most Important AI Companies You Should Be Paying Attention To AND 20 Industrial Stocks Already Riding the AI ​​Wave.

Our methodology

In this article, we selected AI stocks based on the latest news and analyst ratings. These stocks are also popular with hedge funds. Why are we interested in stocks that hedge funds invest in? The reason is simple: Our research has shown that we can outperform the market by mimicking the top stock picks of top hedge funds. Our quarterly newsletter strategy selects 14 small and large-cap stocks every 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 connected to a gaming computer.

NVIDIA Corporation (NASDAQ:NVDA)

Number of hedge fund holders: 179

NVIDIA Corporation (NASDAQ:NVDA) provides graphics, compute, and networking solutions. The company is a leader in AI hardware, controlling nearly 90% of the AI ​​GPU market. However, the company’s AI software capabilities often go unnoticed. NVIDIA has a distinct advantage over competitors like Intel and AMD when it comes to AI software offerings. Some examples include the chipmaker’s CUDA and AI Enterprise software. The company charges $4,500 per year per GPU for AI software, and tech giants that pay for NVIDIA GPUs also pay for those software features upfront. As part of its AI software, the company also sells DGX Cloud, a cloud service that lets users train and deploy AI models in the cloud. That service costs as much as $37,000 per month.

Wall Street analysts are keeping a close eye on NVIDIA Corporation (NASDAQ:NVDA). Morgan Stanley has given the stock an Overweight rating with a $144 price target. In a recent note to investors, analyst Joseph Moore detailed that the advisory expected Blackwell’s initial volumes to be up in the October quarter, as the initial product was functional but had slightly lower yields, and continued to expect volume growth for the next silicon revision through January – all of which was still within the broad strokes of the guidance.

Overall NVDA takes 1st place on our list of top AI stocks. While we recognize NVDA’s potential as an investment, our belief is based on the belief that some AI stocks offer a better chance of achieving higher returns in a shorter time frame. If you’re looking for AI stocks that are more promising than NVDA but are trading at less than 5 times earnings, check out our report on cheapest AI action.

READ MORE: Michael Burry is selling these shares AND Jim Cramer recommends these stocks.

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