Nvidia is among these four stocks I still rate a buy
A couple of stocks powering the tech revolution remain among analyst Rodney Hobson’s favourites. He also gives an update on Nvidia and one of the world’s most famous companies.
27th August 2025 07:34
American energy companies have seen only modest rises in their share prices as all the focus has been on tech outfits and the spread of artificial intelligence. Yet the surge in AI and cloud computing will demand enormous amounts of electricity, so energy will be high on the agenda for years to come.
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One cannot overestimate this phenomenon. Technology is so important to the United States economy that even President Donald Trump dare not create too much disruption. He has already fallen out with erstwhile supporter Elon Musk and must keep the other megatechnophiles onside. Trump has even had to swallow his anti-China rhetoric to keep supplies of chips moving in both directions.
Duke Energy Corp (NYSE:DUK) stands out as one of the largest and most successful electricity companies in the US with more than 8 million customers in six states, with natural gas supplies as a bonus. It is far from overvalued at a price/earnings (PE) ratio of around 20 and a yield at 3.4%.
The shares currently stand at $123, having touched $126 earlier this month. The upward trend over the past two years is set to resume.
Source: interactive investor. Past performance is not a guide to future performance.
A decent alternative is Southern Co (NYSE:SO), which has 9 million electricity customers across three states and natural gas distribution utilities in four states. The share price has not been as consistent in its rises as with Duke and it has slipped somewhat from its recent $96 peak to around $93.
The PE is not quite so appealing at 24.4 and the yield is a little lower at 3.1%.
Source: interactive investor. Past performance is not a guide to future performance.
Hobson’s choice: I have long been a fan of Duke Energy as a solid component of any long-term portfolio. Investors have enjoyed modest share price rises since I first suggested buying at $87 just over six years ago, with a steady dividend on top. The shares are still a buy, certainly up to the all-time high of $126 which is just sitting there waiting to be broken.
I first tipped Southern at $54, also in 2019, and stuck to that rating as recently as May when the stock traded just under $90. While I prefer Duke of the two, Southern remains a buy.
Updates: Half-year results for AI chipmaker NVIDIA Corp (NASDAQ:NVDA) are due out today. All investors, even those light on tech stocks, should study the figures carefully. The stock, which constitutes 6.5% of the S&P 500 index, has become the bellwether for the entire tech sector and an indicator for how the AI revolution is progressing.
Analysts have high hopes for Nvidia, but the company has developed a knack for beating even the customary optimistic forecasts. In the previous quarter, revenue tripled year-on-year to more than $26 billion, with data centre sales surging 400%. More growth should be registered in the latest results.
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The shares have soared from $95 in April to $182 now but they are still only $30 up from the previous peak, being held back by trade wars between the United States and China. Despite all the political bluster, it is in the interests of both countries to reach some kind of accommodation. AI is not only here to stay, it is here to grow exponentially with Nvidia leading the way. The shares remain a buy for the long term.
I pointed out two weeks ago that good figures from The Walt Disney Co (NYSE:DIS) had been greeted with an inexplicable fall in the share price to $113. The stock has picked up a little since then to $117 but there is surely more upside to come for a company with a wide geographic spread and a good range of activities. Leisure is increasingly important to the many who are not, despite newspaper headlines, feeling the pinch. It is not too late to consider a purchase, especially if the shares slip again.
Rodney Hobson is a freelance contributor and not a direct employee of interactive investor.
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