4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Shareholders In Q1 2024: 186
Chip designer NVIDIA Corporation (NASDAQ:NVDA) is the most popular AI stock. The start of June 2024 was an important time for the firm as CEO Jensen Huang shared that NVIDIA Corporation (NASDAQ:NVDA) isn’t stopping with its AI chips and will launch a new Blackwell Ultra chip in 2025. Blackwell is the firm’s latest AI chip platform, and H200 chips were slated to start shipments in Q2. NVIDIA Corporation (NASDAQ:NVDA)’s latest bit of AI announcements expand on industrial uses cases of the new technology. At Computex in Taiwan, the firm revealed that NVIDIA’s AI Enterprise-IGX will now be paired with its sensor processing platform called Holoscan. NVIDIA IGX’s latest refresh boosts its AI processing capability to 1,705 trillion operations per second, allowing use cases such as astronomy and medical imaging to utilize greater computing capacities.
By Q1 2024 end, 186 hedge funds covered by Insider Monkey’s research were NVIDIA Corporation (NASDAQ:NVDA)’s stakeholders. Rajiv Jain’s GQG Partners held the most valuable stake which was worth $12 billion.
Given that NVIDIA Corporation (NASDAQ:NVDA)’s shares have gained a massive 1,756% over the past four years, the question everyone’s asking is is there any growth left? Its revenue has grown by 266% during the same time period, but NVIDIA Corporation (NASDAQ:NVDA)’s price to forward earnings ratio is 42.19 – just 2x of the S&P 500’s 21. Whether the Blackwell Ultra pushes the forward P/E up remains to be seen. Baron Fifth Avenue Growth Fund was able to keenly differentiate between the broader cyclical nature of the chip industry and NVIDIA Corporation (NASDAQ:NVDA)’s unique platform level strengths in its Q1 2024 investor letter where it shared:
It is not lost on us that semiconductors is a notoriously cyclical industry. Historically, the hyperscalers (AWS, Azure, GCP, etc.), who are among NVIDIA’s largest customers, have not invested/spent/consumed CapEx in a straight line. It will be more than a mild surprise then if there was no pullback in demand leading to a significant growth deceleration and a potentially meaningful correction in the price of the stock, sometime in the near future. So, it is incumbent upon us to manage the size of this investment appropriately, while continuing to imagine what the future will likely look like without losing sight of what reality on the ground is today.
Then again…NVIDIA is not just a semiconductor company. Many investors have missed the boat thinking that Apple is just a smartphone company, Amazon is just a retailer, and Tesla is just a car company. We have long argued that just like the other three, NVIDIA is a platform. We are more certain of this now than ever before.
