We recently published a list of The 10 best stocks to buy according to Navellier & Associates. In this article, we take a look at the position of NVIDIA Corporation (NASDAQ: NVDA) compared to the other stocks approved by Navellier & Associates.
Founded in 1987 by growth analyst Louis Navellier, Navellier & Associates is an independent firm based in Reno, Nevada. Navellier & Associates specializes in identifying market inefficiencies to find the highest growth stocks using a disciplined quantitative and fundamental analysis framework. With over 30 years of experience, they offer customized portfolio strategies for individual investors to maximize returns while managing risk. Unlike competitors that mimic indices, Navellier strives to outperform them, resulting in low correlation with benchmarks and greater diversification.
Louis Navellier is the founder, chairman of the board, chief investment officer, and chief compliance officer of Navellier & Associates, Inc. With decades of experience applying academic techniques to real-world market scenarios, he advocates disciplined quantitative analysis to identify stocks that can outperform the market. His approach involves a rigorous three-step process: quantitative analysis, fundamental analysis, and optimization of selected securities for inclusion in the portfolio. This approach has been used by the firm, which uses a highly disciplined bottom-up stock selection process for most portfolios. First, market and stock statistics are reviewed to measure return (alpha) and risk (standard deviation), and stocks in the top percentiles are selected. Next, the highest-rated stocks are further screened for high profit margins, strong earnings growth, and reasonable price-to-earnings ratios based on future earnings. Finally, a proprietary optimization model maximizes portfolio alpha while minimizing standard deviation, creating well-diversified portfolios across different sectors and industries.
Since 1980, he has shared his insights in the MPT Review, a stock advisory newsletter. Since 1987, he has actively managed individual portfolios, mutual funds, and institutional portfolios. Known for his charismatic leadership, Louis Navellier has been featured extensively in the international media, including CNBC, Bloomberg, The Nightly Business Report, and Wall Street Week. His insights have also been highlighted in Barron’s, Forbes, Fortune, Investor’s Business Daily, Money, Smart Money, and The Wall Street Journal. He has been profiled in books such as Kenneth A. Stern’s Secrets of the Investment All-Stars and Alan R. Ackerman’s Investing Under Fire. Mr. Navellier earned his Bachelor’s degree in Business Administration in 1978 and his MBA in Finance in 1979 from California State University – Hayward.
Navellier & Associates is a well-known consulting firm with 1,314 clients and manages $743,578,818 worth of assets, according to their March 2024 Form ADV. Their first quarter 2024 filing shows that they manage $811,568,534 worth of securities, with the top ten holdings representing 29.01% of the total.
Our methodology
This article covers Navellier & Associates’ top 10 stock picks for Q1 2024. We’ve included analyst ratings and key details about these companies, as well as the number of hedge funds investing in each of these companies. Why focus on hedge fund investing? Our research shows that copying the top picks of leading hedge funds can lead to above-average returns. Our quarterly newsletter’s strategy of selecting 14 small-cap and large-cap stocks each quarter has returned 275% since May 2014, outperforming the benchmark by 150 percentage points. (Further details can be found here).
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NVIDIA Corporation (NASDAQ:NVDA)
Value of Navellier & Associates’ investment: USD 53,432,970
Number of hedge fund owners: 186
NVIDIA Corporation (NASDAQ: NVDA) ranks first in Navellier & Associates’ top 10 stock picks, holding 591,360 shares valued at $53,432,970. This investment represents 6.58% of Navellier & Associates’ portfolio. NVIDIA Corporation (NASDAQ: NVDA) is a leading provider of graphics processing units (GPUs), which are critical for AI and machine learning. In addition, NVIDIA Corporation (NASDAQ: NVDA) is expanding into new markets such as data centers, automotive technology, and edge computing, which helps reduce risk and opens up more revenue opportunities.
The opportunity for NVIDIA Corporation (NASDAQ: NVDA) is huge, as evidenced by AI startup CoreWeave, which recently reached a $19 billion valuation thanks to its use of NVIDIA GPUs. As CNBC reports, NVIDIA Corporation (NASDAQ: NVDA) controls 80% of the AI chip market, which could translate to $1.8 trillion in revenue with high profit margins. For fiscal 2024, NVIDIA Corporation (NASDAQ: NVDA) is expected to generate revenue of $31.5 billion, up from $26.9 billion last year, thanks to strong demand for its GPUs in AI and data centers. NVIDIA Corporation (NASDAQ: NVDA) earnings per share (EPS) are expected to rise to $10.15 from $8.73 last year, and gross margins are also expected to remain high at around 66%.
Poland Focus Growth Strategy stated the following about NVIDIA Corporation (NASDAQ: NVDA) in its Q2 2024 investor letter:
“In the second quarter, the dominant narrative in the markets continued to be generative AI (GenAI). If it wasn’t immediately apparent from NVIDIA Corporation (NASDAQ: NVDA) has experienced a meteoric rise to become one of the largest companies in the world, one only has to look to the semiconductor and technology hardware industries for a barometer of sentiment, which together account for more than 70% of the growth of the Russell 1000 (“the Index”) and 85% of the total return of the S&P 500 quarter to date.
Our portfolio has no exposure to NVIDIA or other semiconductor companies that are currently benefiting from demand for fundamental AI hardware. The biggest relative detractors in the quarter were NVIDIA, Apple and Salesforce.
For the second quarter in a row, NVIDIA was the biggest underperformer as the stock rose another 37%, bringing the annual return to +150%. At the time of writing, NVIDIA is the third largest company in the world, but for a brief moment, it overtook Microsoft to become the largest company in the world. Once again, the company delivered stunning results that exceeded already high expectations and reinforced the claim that NVIDIA is the only obvious “AI winner” due to the amount of revenue it is currently generating…” (Click here to read the full text)
NVDA total 1st place on our list of the best stocks to buy according to Navellier & Associates. You can visit The 10 best stocks to buy according to Navellier & Associates to see the other Navellier & Associates-approved stocks that are on hedge funds’ radar. While we recognize NVDA’s potential as an investment, our belief is that AI stocks are more promising to deliver 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: Analyst sees a new $25 billion “opportunity” for NVIDIA And Jim Cramer recommends these 10 stocks in June.
Disclosure: None. This article was originally published on Insider Monkey.
