Hedge Fund Manager Eric Jackson Believes Nvidia is Undervalued and Recommends Another AI Stock

Nvidia, a leading technology company that specializes in artificial intelligence and chipmaking, has seen a significant rise in its stock price recently. Despite this increase, EMJ Capital’s Eric Jackson believes that Nvidia is still undervalued due to its rapid earnings growth. Jackson argues that the company’s impressive performance is not a result of an artificial intelligence bubble, but rather a reflection of its strong fundamentals.

Last month, Nvidia reported better-than-expected earnings for the fiscal first quarter and provided a positive outlook for the current quarter. The company’s earnings per share in the latest fiscal year skyrocketed by nearly 600%, demonstrating its strong financial performance. While Nvidia’s forward price to earnings ratio may seem high compared to other companies, Jackson notes that it is still below its five-year average. This suggests that Nvidia’s stock price could still have room to grow.

Nvidia’s market value has surged by around 145% this year, approaching $3 trillion. Bank of America recently stated that Nvidia’s leadership in artificial intelligence chipmaking could further boost its shares by another 30%. Jackson believes that Nvidia is dominating the AI space, with companies like HPE and Dell benefiting from its success. He sees Nvidia as a key player in the industry that others are happy to align with in order to capitalize on its profitability.

While Nvidia remains a top pick for Jackson in the AI space, he also has his eye on another stock – Dell. Despite a recent pullback in its stock price following earnings, Jackson still sees potential in Dell as an AI play. He points to the company’s AI server storage capabilities as a major driver of future growth. Dell’s incremental AI server revenues from the previous quarter position it well to improve margins and capitalize on the growing demand for data storage solutions.

Overall, Jackson’s bullish outlook on Nvidia and Dell reflects his confidence in the continued growth of the AI industry. As companies increasingly rely on artificial intelligence for data processing and analytics, the demand for innovative technology solutions like those offered by Nvidia and Dell is expected to rise. Investors looking to capitalize on this trend may find opportunities in these companies, which are well-positioned to benefit from the expanding AI market.