We recently published a list of 10 tech stocks to watch amid market volatility, according to Bernstein analyst. In this article, we take a look at where NVIDIA Corporation (NASDAQ: NVDA) is positioned compared to other technology stocks to watch amid market volatility.
The last few weeks have seen a massive sell-off in the technology sector on the stock market, largely due to concerns about return on investment amid exploding investments in artificial intelligence (AI). Valuations have plummeted and fears have been stoked that the AI bubble in the market is about to burst. However, Stacy Rasgon, who has covered semiconductor stocks, one of the most significant sectors in the AI world, for over 15 years, advised investors to stay the course as fears of a bubble are overblown. Rasgon claims that while the probability of a bubble is 100%, he is convinced that now is not the time for it. He pointed to the very real and massive construction of AI data centers as an example, and predicted that it would last for a few years, driving AI stocks higher.
In a recent interview with IBD, Rasgon focused on semiconductor stocks, emphasizing that they have outperformed massively, especially in the AI space. However, he cautioned investors about potential upside for these companies outside of AI, such as in the PC or smartphone space, noting that while they are better than last year, they are obviously not growing as fast. He also added that outside of AI, demand for data centers, server CPUs and networking remained weak. Bernstein, the investment advisory where Rasgon plies his trade, recently unveiled a basket of prominent technology, media and communications stocks that have nearly 26% upside potential from the advisory’s price targets.
This list was created against the backdrop of concerns about the state of the U.S. labor market and consumer spending, as well as a potential artificial intelligence bubble. Bernstein analysts have advised investors to invest their money during this time of heightened market volatility. Several AI-related technology names are trading at huge discounts due to the sell-off. Some of these names are discussed in detail below. For more information on these companies, visit Top 33 AI companies to watch out for And 17 trending AI stocks according to the latest news and analyst ratings.
Our methodology
For this article, we selected companies that operate in the technology space and are on the radar of Wall Street analysts. We based this list on a major investor note from investment bank Bernstein. These stocks are also popular with hedge funds. Why do we care about the stocks 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 the best hedge funds. Our quarterly newsletter’s 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 (read 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 owners: 179
NVIDIA Corporation (NASDAQ: NVDA) provides graphics, computing, and networking solutions. Bernstein analyst Stacy Rasgon recently appeared on CNBC to underscore his bullish views on the AI revolution. He named NVIDIA as a top pick in the sector with plenty of room to run despite recent concerns about capital expenditure and ROI simply because demand has remained high. He pointed out that the company has tremendous potential in the AI data center space. He added that the depth of enterprise AI adoption is encouraging, even if it is progressing more slowly than expected. He highlighted that large customers account for more than 40% of NVIDIA’s total revenue, even though the company has built a larger customer base.
Investment advisory firm Bernstein has given NVIDIA Corporation (NASDAQ: NVDA) stock an outperform rating and a $130 price target. In a recent note to investors, the firm said it was not panicking yet as media reports suggested NVIDIA would delay its Blackwell roadmap by three months. The firm’s analysts said that despite recent concerns about AI ROI, it was at least clear that demand is continuing to grow and NVIDIA has other products to sell in the meantime to meet demand.
NVDA total 1st place on our list of tech stocks to watch amid market volatility. While we recognize NVDA’s potential as an investment, we believe some AI stocks promise higher returns and do so in a shorter time frame. If you’re looking for an AI stock that’s more promising than NVDA but trades at less than 5x earnings, read our report on the cheapest AI stock.
READ MORE: Michael Burry is selling these shares And Jim Cramer recommends these stocks.
Disclosure: None. This article was originally published on Insider Monkey.
