Well-known investor Brad Gerstner recently told CNBC that he had bought Nvidia (NVDA) stock. As reasons for the decision, Gerstner cited very strong demand for GPU chips and President Donald Trump’s decision to exempt semiconductors from tariffs.

Gerstner is the founder of Altimeter Capital.

Gerstner’s Rationale for Buying NVDA

“Demand for GPUs is off the charts,” the investor said. “We’re hearing that from Google (GOOG), Tesla (TSLA), and others,” he added.

Noting that Trump had exempted chips from tariffs, Gerstner suggested that semiconductors are likely to continue to get a pass on tariffs going forward.

“If we charged tariffs on the chips we designed and that are being bought” by large U.S. companies, including Meta (META) and Microsoft (MSFT),” we would be shooting ourselves in the foot,” Gerstner said. He explained that such a move would hinder America’s ability to “win the AI race.”

In light of the exemption that chips received, the impact of tariffs on NVDA will be much less than on many other tech names, Gerstner said.

However, he cautioned that if the U.S. enters a recession, “even Nvidia might not perform that well.”

While we acknowledge the potential of NVDA, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. 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.

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