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Top Stock Picks for Week of February 17, 2025

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NVIDIA Corporation (NVDA - Free Report) is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. NVIDIA is benefiting from the strong growth of artificial intelligence (AI), high performance and accelerated computing. The data center end-market business is benefiting from the growing demand for generative AI and large language models using graphic processing units (GPUs) based on NVIDIA Hopper and Ampere architectures. A surge in hyperscale demand and higher sell-ins to partner across the Gaming and ProViz end markets following the normalization of channel inventory are acting as tailwinds. Collaborations with Mercedes-Benz and Audi are likely to advance its presence in the autonomous vehicles and other automotive electronics space. We expect NVIDIA’s revenues to witness a CAGR of 50.5% through fiscal 2025-2027.  NVIDIA boasts a sturdy cash-flow generating ability. The company’s accelerated revenue growth along with improving operating efficiency is bringing in higher cash flows. NVIDIA is a cash rich company with a strong balance sheet.

 

(EV) maker Tesla (TSLA - Free Report) has evolved into a dynamic technology innovator. Tesla’s EV business is under pressure from pricing challenges and fierce competition, with 2024 marking its first-ever annual delivery decline. However, its long-term growth story remains strong, fueled by its booming Energy Generation & Storage segment, expansive Supercharger network, and AI advancements. Energy deployments doubled in 2024, driven by strong demand for Megapack and Powerwall, and this momentum is expected to continue. Tesla is also making strides in autonomous driving, with plans to launch robotaxi services this year. Musk’s leadership in Trump’s Department of Government Efficiency could help streamline AV regulations, benefiting Tesla’s rollout. Backed by a strong balance sheet and ample liquidity, Tesla is well-positioned for continued innovation and expansion. We remain bullish on the stock.   


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