What insights did Chris Verrone provide regarding the current state of the tech market? How does NVIDIA Corp. (NASDAQ:NVDA) compare to other tech stocks in terms of long-term investment potential? What factors contribute to the sentiment surrounding the tech sector’s performance post-correction? What role does the 2-year Treasury yield play in market predictions according to Verrone? Which segment of NVIDIA’s business saw significant growth due to AI demand, and what were the reported revenues?
We recently published a list of 12 Best Tech Stocks to Buy For Long-Term Investment. In this article, we are going to take a look at where NVIDIA Corp. (NASDAQ:NVDA) stands against other tech stocks to buy for long-term investment. On April 1, Chris Verrone, chief market strategist at Strategas Research Partners, appeared on CNBC’s ‘Closing Bell’ to talk about his outlook on the tech sector. Verrone believes that most of the current market’s negative sentiment has already been factored into recent stock prices. He highlighted that even after the market’s decline, the VIX, and the currency and bond volatility are lower than they were during the mid-March stress period. Plus, fewer stocks are hitting new lows. He thinks that market lows are formed during periods of bad news, and the market will rally from its current level with an anticipated range of 5,900 to 5,950.
Verrone believes that the current downturn is more than a typical 10% correction so it will take some time to figure out the market’s true direction. He emphasized the importance of monitoring market breadth, new highs, and credit conditions in the upcoming weeks and months. He also acknowledged the shift in investor sentiment, with more bears than bulls. As the conversation touched on the impact of the Fed and politics in a market, Verrone stated that he pays more attention to what the 2-year Treasury yield tells him instead of listening to what Fed officials have to say. He noted that the 2-year yield’s decline from 3.83% to 3.85% suggests a shift in the market expectations for the Fed’s actions. He highlighted the resilience of financials during the correction and contrasted it with the weakness of tech. He thinks that, unlike financials that entered the correction as leaders, the tech sector might not be able to regain the leadership role.
While Verrone’s stance acknowledges the current weakness in tech, it’s important to note that the tech sector remains one of the more innovative markets in the long run. For instance, MAG7 continues to be a driving force for this market. We first sifted through financial media reports to compile a list of the top tech stocks that are being touted as long-term investment plays. We then selected the 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? 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’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a colorful high-end graphics card being plugged in to a gaming computer. Number of Hedge Fund Holders: 223 NVIDIA Corp. (NASDAQ:NVDA) is a computing infrastructure company. Its Compute & Networking segment comprises Data Center computing platforms and end-to-end networking platforms. The Graphics segment offers various GPUs for gaming, PCs, enterprise workstation graphics, cloud-based visual & virtual computing, infotainment systems, and others.
The company’s Data Center segment generated a record $35.6 billion in FQ4 2025 revenue which marked a 93% year-over-year rise. For the entire FY25, the revenue doubled as compared to the year-ago period due to the surging demand for AI infrastructure. The adoption of the company’s Blackwell architecture drove this growth. In FQ4 alone, Blackwell’s sales reached $11 billion and marked the fastest product ramp in the company’s history. It delivers up to 25x higher token throughput and 20x lower cost than the Hopper 100 for reasoning AI.
On March 28, Bank of America reiterated a Buy rating with a $200 price target for the company due to its optimism about NVIDIA Corp. (NASDAQ:NVDA) despite the new US AI Diffusion Rules that impact AI chip distribution. Large cloud service providers (CSPs) like Azure, GCP, AWS, and OCI are deploying Blackwell systems to meet the growing demand for AI infrastructure. Consumer internet companies such as Meta are using its GPUs for GenAI and deep learning applications.
Guinness Global Innovators is highly bullish on NVIDIA Corp. (NASDAQ:NVDA) due to its dominant AI chip market position. It stated the following in its Q4 2024 investor letter:
“For a second year running, NVIDIA Corporation (NASDAQ:NVDA) was the Fund’s top performing stock, delivering a stellar return of +177.7% over the year. Since the beginning of last year, Nvidia’s ‘Hopper’ GPUs have been at the centre of exploding demand for chips powerful and efficient enough to facilitate the energy-intensive requirements of AI processes within datacenters. Initially possessing over 95% of market share in these types of chips, Nvidia has been quick to entrench their position as the technological leader in the space, launching the successor to the current ‘Hopper’ GPU in March, Blackwell, inhibiting the likes of AMD and Intel from making meaningful inroads in taking share of the fast-growing market. Compared to the previous iteration (Hopper) which is continuing to fuel Nvidia’s extreme revenue growth, the Blackwell chip is twice as powerful for training AI models and has five times the capability when it comes to “inference” (the speed at which AI models respond to queries). Throughout the year, Nvidia’s financial performance has remained resilient. Quarterly revenues hit $35.1 billion in their most recent quarter, beating consensus expectations by 6% and representing a +94% year-over-year increase. Additionally, Nvidia’s data center segment, driven by the Hopper (H100) chip, grew fivefold over the past year, underscoring the sustained demand for advanced AI infrastructure. The H100 chip, priced at around $40,000, continues to see significant adoption due to its ability to enhance AI model training efficiency while lowering overall costs. This growth is expected to continue as companies invest in upgrading existing data centers and building new ones, with Nvidia well-positioned to capture a significant share of the estimated $2 trillion market opportunity over the next five years. There have been some concerns over Blackwell production delays causing share price volatility; however, Nvidia has recovered swiftly, driven by positive earnings results through the year and assurances from management regarding future supply. Additionally, the release of the H200 chip promises to extend Nvidia’s technological leadership, ensuring continued momentum into 2025. While Nvidia’s valuation remains a topic of debate, the stock is not at a significant premium to history, and it still appears reasonable given its dominant market position, innovative prowess, and exposure to long-term secular growth trends in AI, cloud computing, and data infrastructure. As a result, Nvidia remains well-positioned to deliver sustained outperformance over the long term, making it a cornerstone of growth-oriented portfolios.”
Overall, NVDA ranks 5th on our list of the best tech stocks to buy for long-term investment. While we acknowledge the growth potential of NVDA, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
Is NVIDIA Corp. (NASDAQ: NVDA) the Best Tech Stock to Buy For Long-Term Investment?
As technology continues to evolve at a breakneck pace, investors are constantly on the lookout for the best stocks that can yield substantial returns over the long term. One gem that stands out in recent years is NVIDIA Corporation (NASDAQ: NVDA). Known primarily for its graphics processing units (GPUs), NVIDIA has transformed itself into a key player in various cutting-edge industries, making it a strong contender for long-term investment. But is it the best tech stock to buy? Let’s explore the elements that contribute to NVIDIA’s outstanding position in the market, as well as some potential risks.
Continuing Innovations and Market Leadership
NVIDIA has achieved phenomenal growth, thanks in large part to its ability to innovate and dominate in multiple sectors. While originally known for gaming GPUs, the company has grown its portfolio to include products for data centers, artificial intelligence (AI), automotive technology, and more. NVIDIA’s GPUs are now essential components in training complex AI algorithms, contributing to the rapid advancements in machine learning.
Moreover, with the advent of AI applications ranging from natural language processing to computer vision, NVIDIA is poised to benefit massively from the increasing integration of AI across industries. Its platform, CUDA, allows developers to harness the power of the GPU, making it easier to develop and deploy AI applications. This software ecosystem further solidifies its leadership and showcases a major competitive advantage that is difficult for rivals to replicate.
Robust Financial Performance
A look at NVIDIA’s recent financials reveals a company with strong earnings growth and a consistent track record of profitability. For fiscal year 2023, NVIDIA reported revenues exceeding $26 billion, a significant increase from previous years, primarily driven by the data center and gaming segments. This growth trajectory underscores the company’s resilience and adaptability in a rapidly changing technology landscape.
Furthermore, the company has demonstrated operational efficiency through disciplined cost management and strategic investments. With an astounding gross margin consistently surpassing 60%, NVIDIA is effectively converting revenues into profits, a crucial trait for investors focusing on long-term returns.
Expanding Market Opportunities
The technology ecosystem is vast and constantly evolving. Emerging trends such as edge computing, autonomous vehicles, and smart cities present enormous opportunities for NVIDIA. The automotive sector, in particular, is worth noting. NVIDIA is invested heavily in AI-powered vehicle technologies, including self-driving capabilities. Partnerships with major automakers position it well as the industry transitions towards automated driving solutions.
Additionally, the demand for advanced graphics technologies in virtual reality (VR) and augmented reality (AR) is expected to burgeon in the coming years. This positions NVIDIA to capture new revenue streams as these technologies gain wider adoption in gaming, training, and simulations.
Valuation and Market Sentiment
While NVIDIA’s past performance and future potential are compelling, no investment comes without its challenges. For some analysts, the stock might appear overvalued based on traditional metrics. The price-to-earnings (P/E) ratio for NVIDIA is significantly higher than industry averages, raising questions about its sustainability.
Yet, pro-investors often argue that high-growth tech stocks warrant higher valuation multiples, especially when they dominate their markets and have an innovative edge. NVIDIA’s stock has been a favorite among growth investors, but prospective buyers must weigh the potential for volatility and corrections inherent in high-valuation stocks.
Competitive Landscape
While NVIDIA enjoys a strong position, it is not without competition. Rivals like AMD, Intel, and new entrants are continually trying to capture market share, particularly in the AI and data center markets. Additionally, technological advancements mean that the landscape can change rapidly, and what is a winning strategy today may lose its effectiveness tomorrow.
Moreover, geopolitical factors, such as trade tensions and export controls, particularly regarding high-tech components to certain countries, could pose challenges to NVIDIA’s performance. Additionally, as the race for leadership in AI heats up, rapid innovation will be critical to maintain its competitive advantage.
Conclusion: A Strong Long-Term Candidate but Not Without Risks
In conclusion, NVIDIA Corporation exhibits many characteristics of an exceptional long-term investment in the tech space: potent growth, innovative technology, market leadership, and a robust financial position. Its ability to capitalize on trends like AI and data centers places it ahead of many competitors. However, potential investors should remain mindful of the high valuation, competitive pressures, and external challenges.
While it may not be the only tech stock to consider, NVIDIA certainly has the ingredients that make it a prime pick for those looking for long-term investment opportunities in a dynamic and expanding technological landscape. As always, investors should conduct their own research and consider their risk tolerance before diving into any investment, but for those prepared to bet on the future of technology, NVIDIA presents a attractive option.
NVIDIA Corp. (NASDAQ: NVDA) has emerged as a dominant player in the technology sector, especially due to its advancements in graphics processing units (GPUs) and its strategic positioning in areas such as artificial intelligence (AI), data centers, and gaming. Here are some factors to consider when evaluating NVIDIA as a long-term investment:
Market Leadership: NVIDIA holds a significant share of the GPU market, which is crucial for gaming, AI, and machine learning applications. Its continuous innovation and ability to capture new markets contribute to its strength.
AI and Data Centers: The demand for AI and machine learning technologies is rapidly growing. NVIDIA’s GPUs are essential for training AI models, which positions the company well in a burgeoning industry. Their data center revenue has been a major growth driver, reflecting increasing enterprise adoption of AI.
Financial Performance: Evaluating NVIDIA’s financials is essential. Consistent revenue growth, strong profit margins, and a solid balance sheet can indicate a healthy company capable of investing in future growth.
Diversification: Beyond gaming, NVIDIA is diversifying into sectors like automotive (with its drive towards self-driving technology) and edge computing, which can reduce dependency on a single revenue stream.
Competition and Risks: While NVIDIA has a strong position, it faces competition from companies like AMD and Intel, which are also investing in GPUs and AI technologies. Keeping an eye on their strategies is important for gauging NVIDIA’s market standing.
Industry Trends: The overall tech landscape, including semiconductor demand, regulatory changes, and global economic conditions, can impact NVIDIA’s performance.
- Valuation: Consider the stock’s current valuation compared to its historical performance and peers. High growth stocks often have elevated price-to-earnings ratios, which can present risks if growth does not meet market expectations.
As with any investment, individuals should conduct thorough research and consider their financial situation and risk tolerance before making decisions.