We recently compiled the following list. 15 Best Growth Stocks to Buy in the Next 5 Years. In this article, we'll take a look at how NVIDIA Corporation (NASDAQ:NVDA) stacks up against other growth stocks.
Kevin Mahn, president and CIO of Hennion & Walsh Asset Management, recently appeared on CNBC on January 6 to discuss current market momentum and how investors will see growth opportunities in 2025. emphasized the need to be selective in finding He emphasized that although MAG7 has recently led the market, that leadership may not continue. Looking at historical data, Mahn pointed out that since 1950, there have been nine instances where the market has risen more than 20%, and eight of those times the market has risen. However, he noted that the average increase in the following year was only 3.6%, demonstrating the need for careful selection. He also acknowledged recent market trends, including the potential for a shift in investor sentiment following events such as the S&P 500's poor performance and the Santa Claus Rally.
He predicted a path for interest rates to fall, predicting a 50 basis point (bp) cut in rates this year, instead of the previously expected 100 basis point (bp) cut. Maan suggested this environment would create favorable conditions for stocks and bonds, but urged investors to diversify beyond mega-cap tech stocks into sectors such as biotech and aerospace. Earlier, on January 3, Maan said that after two consecutive years of profits, a third year of strong performance was unlikely. He said it appears the Grinch disrupted this year's Santa Claus rally.
He also cited concerns from investors trying to time the market or sell their holdings. He warned that trying to time the market is often futile. Instead, he advocated rebalancing your portfolio to align with your long-term goals and risk tolerance. He suggested that the economic situation is changing, with interest rates expected to fall and economic growth to stagnate. Maan advised investors to consider taking profits from sectors that have traditionally led the market and reallocating those funds to other areas that are poised for future growth. He highlighted biotechnology as a promising field and cited bipartisan agreement on the need to lower drug prices. This change could make large pharmaceutical companies look for new sources of revenue and make smaller biotech companies more attractive.
methodology
We started by scouring online rankings and internet lists to create a list of the top growth stocks to buy over the next five years. Next, we selected stocks with high five-year earnings growth and high analyst upside potential. We selected 15 stocks that were most popular among elite hedge funds and that were bullish by analysts. Stocks are ranked by the number of hedge funds that own the stock as of Q3 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 points (sClick here for details).
A close-up view of a colorful high-end graphics card connected to a gaming computer.
Number of hedge fund holders: 193
5-year revenue CAGR: 62.43%
Upward potential as of January 15: 30.72%
NVIDIA Corp. (NASDAQ:NVDA) is a technology company that designs and manufactures GPUs for the gaming and professional markets. We also develop AI platforms, high-performance computing solutions, and self-driving vehicle technologies that power industries such as gaming, data centers, and automotive.
Bank of America recently maintained a $190 price target on the stock, suggesting 27% upside potential. This optimism is fueled by the release of Blackwell GPUs, which has already secured 12 months' worth of orders. At CES 2025, the company announced Project DIGITS, a personal AI supercomputer powered by the new GB10 Grace Blackwell superchip. This compact system delivers petaflops of AI performance while running on common household electricity. Project DIGITS is designed to help researchers, data scientists, and students develop and run large-scale AI models locally. With 128 GB of memory and up to 4 TB of storage, this system is well-equipped to handle demanding AI workloads.
In Q3 2024, NVIDIA Corp. (NASDAQ:NVDA) achieved record revenue of $35.1 billion, up 94% year over year. This was driven by a 112% increase in data center revenue to $30.8 billion. GPU revenue has shown strong growth, increasing 67% annually over the past three years. This performance is driven by the demand for computing power required by advances in AI and ML.
Manor Capital Management noted that the value of NVIDIA Corporation (NASDAQ:NVDA) has more than tripled over the past year due to strong AI-related demand and continued revenue growth that exceeded market expectations. Announcements for Q3 2024 are as follows: letter to investors:
“As of this publication, Nvidia is up about 150% year-to-date. NVIDIA Corporation (NASDAQ:NVDA) was the biggest gainer on the S&P 500 last year, more than tripling in value over the last year. In June, less than four months after surpassing the $2 trillion mark, the market cap reached an astonishing $3 trillion. Enthusiasm for all things AI-related, especially the major chip manufacturers whose products are essential to driving AI technology, continues to fuel the market. Last quarter, and for the fifth straight quarter, Nvidia reported revenue and profits that beat Wall Street expectations. The stock rose +37% in the second quarter alone. ”
Entire NVDA 1st place Included in our list of the best growth stocks to buy over the next five years. We recognize the growth potential of NVDA as an investment and believe that AI stocks have great potential for high returns in the short term. If you're looking for AI stocks with more promise than NVDA, but trading at less than 5x earnings, check out our report. cheapest AI stocks.
Read next: 20 Best AI Stocks to Buy Now and Complete list of 59 AI companies with market capitalization less than $2 billion.
Disclosure: None. This article was originally published on Insider Monkey.