NVIDIA Corporation (NASDAQ:NVDA) has been analyzed in relation to other top company stocks as part of a list identifying the 7 Best Big Company Stocks to Buy Now. Major technology firms, including mega-cap stocks, have significantly influenced the total returns in the US stock market. Experts note that from the beginning of 2023 to the end of May 2024, only a small number of the largest and most established tech companies were responsible for approximately 60% of the S&P 500’s over 40% gains.
According to FactSet, during the second quarter of 2024, around 79% of S&P 500 companies exceeded earnings expectations, while about 60% reported higher-than-anticipated revenue. Semiconductor stocks played a crucial role in driving the S&P 500 Index during this time, with AI themes benefiting various sectors, including utilities, from increased demand for power for AI data centers.
As earnings season for the third quarter of 2024 approaches, Wall Street experts have noted a decline in earnings estimates, which is more significant than previous quarters. Overall, total earnings in the S&P 500 are expected to rise by 3.9% year-over-year, supported by a revenue growth of 4.7%. However, this growth forecast has decreased from a higher estimate of 6.9% at the start of July.
The decline in estimates is attributed to various risks, including economic uncertainty, slower inflation reduction, expectations of sustained high interest rates, and geopolitical tensions. Analysts emphasize that uncertainty surrounding the upcoming US Presidential elections is a key factor influencing these estimates. As the November elections draw near, the political landscape may lead to heightened economic policy uncertainty, prompting consumers to spend less and businesses to pause investments and hiring.
Brandywine Global Investment Management has observed that consumers’ anxiety reflects in economic indicators. They cited a rare occurrence where the current economic conditions index is below consumer expectations, indicating consumer unease.
Despite these concerns, Brandywine Global’s analysts suggest that investors should maintain focus on large-cap stocks. The firm highlights how the political climate and upcoming elections are impacting consumer behavior, which in turn affects corporate performance. Historical data also shows that the economic policy uncertainty index tends to rise significantly during election months, particularly when the race is close and polarized.
A JPMorgan survey indicates that investors perceive political risks, both domestically and internationally, as the primary destabilizing factor for equities. In the first half of 2024, strong earnings and an AI boom have benefitted broader equities, particularly in technology, with expectations that the recent tech rally might extend to other sectors while inflation moderates and growth shows signs of slowing.
To identify the 7 Best Big Company Stocks to Buy Now, stocks were filtered based on market capitalization and popularity among top hedge funds. This strategy aims to replicate the best stock picks from leading hedge funds, which have historically outperformed the market.
NVIDIA Corporation (NASDAQ:NVDA), with 179 hedge fund holders, remains a prominent player in the market, recognized for its high-performance graphics processing units (GPUs) used across various sectors, including gaming, data centers, and automotive systems. NVIDIA has invested significantly in refining its software and hardware capabilities, allowing it to lead in sectors demanding high computation power, particularly for AI applications as data center growth continues.
Looking ahead, NVIDIA expects to generate revenue of approximately $32.5 billion for the third quarter of 2025. In the first half of 2025, the company returned over $15 billion to shareholders through share buybacks and dividends. Analysts from JPMorgan Chase & Co. have raised their target price for NVIDIA shares from $115 to $155, maintaining an “Overweight” rating.
Overall, NVIDIA ranks fifth on the list of the top big company stocks to consider. While it is viewed as a strong investment, some analysts believe there are undervalued AI stocks with greater potential for higher returns in a shorter time frame.