Is NVIDIA Corporation (NVDA) the Best Safe Stock to Buy According to Hedge Funds?

We recently published a list of 11 Best Safe Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other best safe stocks to buy according to hedge funds.

In times when you never know what you’ll wake up to the next morning, playing safe seems to be the wisest choice. Amid consistent market shifts and global uncertainties, it’s difficult not to lean towards reliability. With rising global recession risks and political uncertainties, protecting the capital has become a priority for many. As Charlie Munger, Vice Chairman of Berkshire Hathaway, once said,

“The idea of investing in a company just because it’s safe is not necessarily a good idea. But it’s a much better idea than investing in something that is clearly risky.”

If we think about a “safe” stock, a low-risk stock usually comes to our mind. While it’s true, there is even more to it. A safe stock generally stems from a well-established company possessing a strong balance sheet, a track record of decent performance, solid market positioning, and a dividend history. So, when looking for a safe stock, it’s important to look for not one, not two, but all of these metrics. In its entirety, these are usually “blue chip stocks” that are market leaders in the industries they operate.

Hedge funds, recognized for their strategies and in-depth market understanding, have long advocated for such stocks for their reliability and resilience. These managers carefully study the market trends and then weigh in on businesses that are deemed to deliver both value and predictability.

As reported by Reuters, hedge funds are fleeing the stocks of companies that are providing what customers want, and what they don’t need. As the signs of a global recession are becoming more and more evident, hedge funds are dumping their positions in consumer discretionary. “Hedge funds dumping consumer discretionary stocks strongly suggests they’re bracing for economic trouble, likely a recession,” mentioned Bruno Schneller, the Managing Director at Erlen Capital Management.

Similarly, a Goldman Sachs report, comparing the gains by Hedge Fund VIP basket and the broader market, indicates that the top 50 stocks preferred by hedge funds have collectively returned 10% in 2025 relative to the market’s 3% gain.

In a “Low-Risk Stocks Outperform within All Observable Markets of the World” paper by Nardin Baker and Robert Haugen, the differences in performance by low-volatility stocks and high-volatility stocks in developed and emerging equity markets worldwide were compared. The results revealed that stocks with low realized volatility exhibit higher future returns at lower risk than stocks with relatively higher realized volatility, thus contradicting the traditional inference that attributes higher returns to higher risks. Given this, we will take a look at some of the best safe stocks to consider.

Our Methodology

In compiling a list of the 11 best safe stocks to buy according to hedge funds, we used Insider Monkey’s database of over 1,000 hedge funds, as of Q4 2024, and picked mega-cap stocks with positive five-year returns and next-year revenue growth. All of these factors are considered to ensure that the stocks selected yield low volatility and high safety. In addition, we also considered stocks that pay dividends to shareholders to ensure safety and reliability. The stocks are ranked in ascending order of the hedge funds having stakes in them.

At Insider Monkey, we are obsessed with hedge funds. 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).

NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge funds holding: 223

Forward Dividend: $0.04

NVIDIA Corporation (NASDAQ:NVDA) is a California-based tech company that designs and manufactures computer graphics processors, chipsets, and associated software. A pioneer of GPU-accelerated computing, the company is igniting modern AI and serving globally leading companies like Meta Platforms.

NVDA has been almost everyone’s favorite stock for the past few years. Nothing but exceptional, NVIDIA Corporation (NASDAQ:NVDA) is leading the market due to its innovation and technological semiconductor superiority. With the market tossing and turning, investors are valuing stocks that ought to rebound strongly, and that’s what NVDA is. When it can thrive as a fledgling start-up offering graphics cards, which sparked a heated and cyclical race, becoming a graveyard to many, we believe NVDA can survive anything.

The company has strategically prepared a three-year plan. Coupled with the Hopper series, NVIDIA Corporation (NASDAQ:NVDA) is going to focus on Blackwell GB200, Blackwell NV36 and NV72, and Blackwell Ultra (Blackwell 300), each with its own offering, during FY25-26. The development of Vera Rubin and Feynman is set to dominate the next two years, respectively.

NVIDIA Corporation (NASDAQ:NVDA) is also diversifying into new product lines that, when you think about the future, definitely come to your mind. Among these are AI factories, robotics, Autos with fast and capable chips, and Agentic AI. The demand for AI isn’t going to slow down either, with hyperscalers like Alphabet and Amazon showing a strong need to build AI. While Alphabet has already acquired $10 billion of Blackwells, Amazon is working towards making AI its fourth pillar, embedding it in segments like advertising, AWS, and ‘Buy for me’ products.

Additionally, the company masters the art of retaining the right people. Since NVIDIA Corporation (NASDAQ:NVDA) is all about innovation and creative culture, the workforce hired, including engineers and architects, showcases teamwork, technical knowledge, and experience. This is one of the core strengths of the giant, particularly as the company is entering a new era of digital realities.

Overall, NVDA ranks 5th on our list of best safe stocks to buy according to hedge funds. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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