We recently compiled a list of the 10 Best Monopoly Stocks to Buy.In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other monopoly stocks.
Morgan Stanley believes the bull market might not be finished, and the S&P 500 might close the year with single-digit gains. There can be further declines in the S&P 500, which can result in attractive entry points. Historically, when stocks decline 15%, the average returns after a year tend to be attractive, says Morgan Stanley. Furthermore, the returns are even more attractive when a 20% drop becomes an entry point. That being said, a major risk to the broader equity market can be a resurgence of inflation and the US Fed increasing rates, along with tariff impacts.
S&P 500 Can Deliver Single-Digit Returns
Morgan Stanley Investment Management’s Applied Equity Team believes that 2025 can be a “pause” year for the broader S&P 500, posting single-digit gains. This remains consistent with the firm’s outlook, which was shared at the beginning of the year, suggesting that 3rd year of a bull market tends to deliver mediocre—but positive returns, together with increased volatility. Analyzing 12 times since 1950 that the broader S&P 500 declined a minimum of 20% from its peak, there was a recession in 9 of such instances, says the investment firm. In the current instance, the combination of the market decline or the recession talk appeared to be sufficient to spur a policy response.
Morgan Stanley believes that stocks can retest lows seen in early April. The base case outlook is for gains in 2025, and the market is open 251 days a year. If stocks decline 20% or more, the investment firm opines that investors will do well to consider increasing the equity allocations more aggressively. In the 12 times since 1950 in which the S&P 500 fell 20%, the average subsequent 1-year return with that fall as an entry point is 19%. Fidelity International believes that, in this market, which is characterised by increased uncertainty, a focus on dividends as a component of total return can offer support.
Furthermore, the firm believes that it is critical to combine an emphasis on high-quality businesses with valuation discipline in a bid to avoid overpaying for companies and have a better chance of generating strong long-term returns. In difficult market environments, earnings resilience remains critical. This doesn’t mean a top-down allocation to defensive industries, but selecting companies possessing resilient business models throughout a broad range of sectors with the help of detailed bottom-up analysis. Owning resilient businesses, diversified across industries, leads to increased earnings persistence as compared to the broader market indices, says Fidelity International.
Our Methodology
To list the 10 Best Monopoly Stocks to Buy, we scanned through monopoly ETFs and several online rankings. After getting an extensive list, we chose the ones that were the most popular among hedge funds. Finally, the stocks were arranged in ascending order of their hedge fund sentiment, 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).
NVIDIA Corporation (NVDA) Reiterated as Buy — Analysts See AI Capex Upside "More Important Than Ever"
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA)’s dominance in the GPU market is expected to be sustained for a long time, aiding its growth prospects. The company is a leading producer of discrete graphics processing units for data centers, gaming, and AI workloads. Its GPUs are regarded as the gold standard for training AI models. It has incredible leverage and pricing power in AI hardware and software ecosystems. Morgan Stanley analyst Joseph Moore sees robust demand for inference chips. The analyst’s “Buy” rating is backed by NVIDIA Corporation (NASDAQ:NVDA)’s emphasis on AI-driven growth, together with strong demand for its GPUs.
As per the analyst, NVIDIA Corporation (NASDAQ:NVDA) continues to benefit from robust demand for its GPUs, mainly for inference workloads, despite worries related to the macro risks and supply chain challenges. The analyst further highlighted that with AI adoption growing globally, the demand for inference chips can fuel the company’s long-term growth. The company reported revenue for the Q4 2025 of $39.3 billion, reflecting a rise of 12% as compared to the previous quarter, and a rise of 78% YoY. The company successfully ramped up the massive-scale production of Blackwell AI supercomputers. For Q1 2026, NVIDIA Corporation (NASDAQ:NVDA) expects revenue of $43.0 billion, plus or minus 2%. Furthermore, it expects GAAP and non-GAAP gross margins to be 70.6% and 71.0%, respectively, plus or minus 50 bps.
Investment advisory firm Ithaka Group released Q1 2025 investor letter. Here is what the fund said:
“NVIDIA Corporation (NASDAQ:NVDA) is the undisputed leader in accelerated computing, with dominant market share in Graphics Processing Units (GPUs) powering AI workloads across data centers, edge devices, and emerging platforms. Its end-to-end ecosystem—from silicon to software (CUDA, networking, and AI frameworks)—creates high switching costs and a widening competitive moat. With secular demand for AI infrastructure still in its early innings, Nvidia stands to benefit from sustained topline growth and strong operating leverage. In early January, a little known Chinese AI company, DeepSeek, released its large language model (LLM), DeepSeek-R1, to an unexpecting world. This model was purportedly trained on very few high-end Nvidia chips and was highly efficient when compared to other leading models. This release set off a chain reaction where investors have had to grapple with the idea that the world may not need as many GPUs as previously thought, which hampered the Nvidia buy case and sent the P/E multiple down to its cheapest level in the past 5 years.”
Overall NVDA ranks 1st on our list of the monopoly stocks to buy. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some deeply undervalued 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 a deeply undervalued 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.
