We recently compiled a list of the 8 most profitable blue chip stocks to invest in. In this article, we’ll take a look at how NVIDIA Corporation (NASDAQ:NVDA) stacks up against other profitable blue-chip stocks.
September’s inflation report was better than expected, showing that inflation remains strong. Headline inflation rose 2.4%, slightly above expectations of 2.3% and down from 2.5% in August. Month-on-month, the CPI rose by 0.2%, exceeding expectations of 0.1%.
The core inflation rate, which excludes food and energy, also exceeded expectations at 3.3%, compared to the expected 3.2%, marking a slight increase from August. On a monthly basis, core CPI rose 0.3%, in line with August’s figure but above expectations for a 0.2% rise.
Following this report, markets are predicting either a 25 basis point rate cut or no rate cut at the next Fed meeting. According to the CME FedWatch tool, 79.9% of interest rate traders expect rates to be cut by 450 to 475 bps at the next Fed meeting, while 20.1% expect rates to remain unchanged. At the beginning of the month, 32.1% expected a 50bp rate cut, and 67.9% expected a 25bp cut.
Understand inflation trends and the Federal Reserve’s strategy
Despite continued inflation, IBM Vice Chairman Gary Cohn believes the Fed will cut interest rates by 100 bps this year. In an interview on CNBC’s “Money Movers,” he suggested the U.S. is experiencing something of a soft landing, with inflation falling but not steady. He said inflation is likely to hover around this level, making it difficult to reach the Fed’s 2% target.
Cohn noted that for the first time in nearly 20 years, the Fed is balancing its dual responsibilities of employment and price stability, focusing primarily on both at once. He believes the Fed is making the right decision, but is now in a delicate position after missing the opportunity to meet this year.
Cohn expects the Fed to cut rates by a total of 100 basis points this year, and perhaps 25 basis points in the coming months. In response to a question about the inflation target, he said he thought it would be better to slightly exceed the target inflation rate, and that an inflation rate of around 2.2% would be more acceptable if the economy was growing than below the target. He suggested that it would be possible.
Cohn also highlighted concerns about geopolitical risks, saying global tensions could lead to inflationary pressures through supply chain disruptions and higher transportation costs.
the story continues
our methodology
In this article, we use a stock screening tool to identify nearly 30 stocks with market caps of over $100 billion and TTM net income of over $10 billion. We then narrowed the list to the eight stocks that have a five-year compound annual growth rate of net income of greater than 10% and are most widely held by institutional investors. The most profitable blue chip stocks are listed in ascending order of hedge fund sentiment from Insider Monkey’s Q2 database of 912 hedge funds.
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 percentage points (Learn more ).
A close-up view of a colorful high-end graphics card connected to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA)
Market capitalization: $3.254 trillion
5-year net profit CAGR: 80.81%
TTM Net Income: $53.09 billion
Number of hedge fund holders: 179
NVIDIA Corporation (NASDAQ:NVDA) focuses on graphics, computing, and networking solutions. It became famous for its revolutionary graphics processing unit (GPU), known for its ability to process multiple tasks at once. The company was initially a significant player in the gaming industry, but has since expanded into professional visualization, data center, and automotive sectors. It is one of the most profitable blue chip stocks.
One of the best stocks to buy and hold for the next 10 years. The company’s AI networking platform, Spectrum X, is projected to generate billions of dollars in revenue within a year. The company recently signed a deal with Salesforce to improve its AI and data services for enterprises. Additionally, the company launched Aerial, an AI tool designed to optimize wireless networks for next-generation technologies such as 5G and autonomous systems.
NVIDIA (NASDAQ:NVDA) is scheduled to report earnings in November and expects its Hopper architecture and Blackwell chips to generate $32.5 billion in revenue in the third quarter of fiscal 2025. The company’s CEO, Jensen Huang, told CNBC that demand for the company’s next AI chip is “insane,” with companies like OpenAI, Microsoft, and Meta eager to get their hands on the chip. He said he was there.
On October 10, The Fly reported that Morgan Stanley’s NVIDIA (NASDAQ: NVDA) Blackwell NVL36/72 system is in high demand and will be sold out next year after a three-day roadshow with the company’s CEO and CFO. It was reported that this was revealed. . The company highlighted the long-term potential of accelerated computing and noted that the AI investment cycle is still in its early stages.
Morgan Stanley maintains the company’s rating at “overweight” and sets a price target of $150, based on favorable market conditions and the company’s continued momentum.
The Ithaka Group’s Ithaka US Growth Strategy said the following about NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is a market leader in visual computing through the production of high-performance graphics processing units (GPUs).The company serves four major growth markets: gaming, professional visualization, data center, and automotive. NVIDIA’s products have the potential to lead and disrupt the most exciting areas of computing, including data center acceleration, artificial intelligence (AI), machine learning, and autonomous driving. There are two reasons for the stock’s rise in the quarter: One, the stock benefits from a lot of excitement surrounding further developments in generative AI and the possibility that this will require the purchase of large amounts of Nvidia products in the distant future. Second, NVIDIA also posted strong results in the quarter and exceeded market expectations for Q2 2025 to support today’s accelerated computing infrastructure. demonstrated an advantageous position in the construction of
Overall, NVDA ranks 6th on our list of the most profitable blue-chip stocks to invest in. While we acknowledge NVDA’s potential as an investment, we believe AI stocks are more likely to deliver higher returns and do so in the short term. shorter period. If you’re looking for AI stocks with more promise than NVDA, but trading at less than 5x earnings, check out our report on the cheapest AI stocks.
Read next: $30 trillion opportunity: Morgan Stanley’s 15 best humanoid robot stocks to buy and Jim Cramer says NVIDIA has ‘become a wasteland.’
Disclosure: None. This article was originally published on Insider Monkey.
