We recently published a list of Top 10 AI Stocks Dominating the Market Right Now. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other top AI stocks dominating the market right now.

Attention is slowly shifting from US chip stocks to what analysts consider as the next big AI play: software. Investor enthusiasm has begun waning for semiconductor stocks due to tariff-driven volatility and the emergence of lower cost AI models from China’s DeepSeek. The AI chips transition is now paving the way for the second stage of the innovation cycle where software companies will begin to monetize AI breakthroughs.

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“The second stage of the innovation cycle is when people start utilizing products and that’s when the software companies start getting paid … we’re now starting to see the ascendancy of the software part of the equation.”

-Keith Weiss, equity analyst at Morgan Stanley.

Previously, software startups such as Harvey were dismissed by Silicon Valley investors. Investors used to take these software firms lightly, stating them as mere wrappers around OpenAI’s models. However, now the narrative is shifting and these AI wrappers are becoming quite popular today.

“The market’s perception of companies like us… was that they’re GPT wrappers, referencing a derisive term used to suggest the repackaging of OpenAI’s models. If investors “were going to put money into something,” he added, “it needed to be into OpenAI or Anthropic.”

-Harvey, Chief Executive Officer Winston Weinberg

Here is what another investor has to say:

“Just like after the iPhone launched, there were millions of new mobile apps,” said Mignano, an investor in the AI notetaking service Granola, which uses technology from OpenAI and Anthropic. “Now with AI and LLMs, there will be millions of new AI products.”

-Michael Mignano, a partner at Lightspeed Venture Partners

DeepSeek has also played its due part in leading the shift from chip stocks to software and similar AI plays.

“Investors are looking for the next three-to-five-year stories … those companies that are going to benefit from what Nvidia has already done.”

David Russell, global head of market strategy at TradeStation.

For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points  (see more details here).

A close-up of a colorful high-end graphics card being plugged in to a gaming computer.

NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 223

NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. On March 6, Bloomberg reported that OpenAI and Oracle are planning to begin filling a massive new data center in Texas with tens of thousands of powerful AI chips from Nvidia Corp. The move would mark the establishment of the first facility for the $100 billion Stargate infrastructure.

The site is anticipated to house 64,000 of Nvidia’s coveted GB200 semiconductors by the end of 2026, adding them to several halls of the data center in phases. These powerful GB200 microchips cost between $60,000 and $70,000 each. According to an OpenAI spokesperson, the startup is working together with Oracle on the design and delivery of the Abilene data center, while Oracle is going to be in charge of the supercomputer.

Overall, NVDA ranks 3rd on our list of top AI stocks dominating the market right now. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.