Why are we focused on the stocks that hedge funds are heavily investing in?The answer is straightforward: our analysis indicates that we can surpass market performance by mimicking the best stock selections made by top hedge funds. Our quarterly newsletter employs a strategy that chooses 14 small-cap and large-cap stocks each quarter, achieving an impressive return of 275% since May 2014, outpacing its benchmark by 150 percentage points (for more information, click here). A close view of a vibrant, high-end graphics card being connected to a gaming computer. NVIDIA Corporation (NASDAQ:NVDA) Number of Hedge Fund Holders: 193 NVIDIA Corporation (NASDAQ:NVDA) focuses on AI-driven solutions, providing platforms for data centers, autonomous vehicles, robotics, and cloud services. Barclays analyst Tom O’Malley has raised Nvidia’s (NASDAQ:NVDA) price target from $160 to $175, maintaining an Overweight rating in its 2025 forecast for the semiconductor sector. The firm predicts that 2025 will be influenced by a divide between companies gaining from AI and those that are not.

Barclays is selective with its AI stock choices, preferring those with proprietary serializer/deserializer technology, while expressing less optimism about cyclical semiconductors, analog, PC, and handset stocks, indicating that recoveries in these segments may take more time to develop. Overall, NVDA stands 2nd on our list of AI stocks that investors might have overlooked. While we recognize NVDA's investment potential, we are more confident that AI stocks present a greater opportunity for achieving higher returns in a shorter period. If you’re in search of an AI stock with more potential than NVDA but trading at under 5 times its earnings, be sure to check out our report on the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.