Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund returned -0.11% (gross) and -0.31% (net) compared to 8.33% for the Russell 1000 Growth Index and 4.28% for the S&P 500 Index. Generative AI (GenAI) remains the dominant market narrative in the second quarter. The portfolio does not own NVIDIA or other Semiconductor companies that are presently benefitting from the demand for AI hardware. However, with the portfolio’s extensive investment in software and IT services, the firm anticipates that GenAI’s long-term economic gains will go to these industries. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Polen Focus Growth Strategy highlighted stocks like NVIDIA Corporation (NASDAQ:NVDA), in the second quarter 2024 investor letter. NVIDIA Corporation (NASDAQ:NVDA) offers graphics and compute and networking solutions. The one-month return of NVIDIA Corporation (NASDAQ:NVDA) was -7.41%, and its shares gained 166.01% of their value over the last 52 weeks. On July 18, 2024, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $121.09 per share with a market capitalization of $2.979 trillion.
Polen Focus Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“In the second quarter, the dominant narrative in markets continued to be generative AI (GenAI). If it wasn’t immediately evident from NVIDIA Corporation’s (NASDAQ:NVDA) meteoric rise to among the largest companies in the world, one need only look so far as the Semiconductor and Technology Hardware industries as a gauge of sentiment, collectively accounting for greater than 70% of the Russell 1000 Growth (“the Index”) and 85% of the S&P 500 headline return quarter to date.
Our Portfolio has no exposure to NVIDIA or other Semiconductor companies currently benefiting from demand for foundational AI Hardware. The largest relative detractors in the quarter were NVIDIA, Apple, and Salesforce.
For the second quarter in a row, NVIDIA represented the top detractor to relative performance as the stock climbed another 37%, bringing the year-to-date return to +150%. As of this writing, NVIDIA is the third largest company in the world, but for a brief moment, it surpassed Microsoft to become the largest company in the world. Yet again, the company delivered blowout results that surpassed already lofty expectations, reinforcing the narrative that NVIDIA is the only obvious “AI winner” due to the amount of revenue it is currently generating…” (Click here to rad the full text)
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA) is in 5th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 186 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the first quarter which was 173 in the previous quarter. NVIDIA Corporation (NASDAQ:NVDA) reported another record quarter in Q1 with $26 billion in revenues, representing a 262% year-over-year increase. While we acknowledge the potential of NVIDIA Corporation (NASDAQ: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 timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed NVIDIA Corporation (NASDAQ:NVDA) and shared the list of AI stocks that analysts believe have greater upside potential. Nvidia Corp (NASDAQ:NVDA) is in 4th position on the list. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
