Here’s Why NVIDIA (NVDA) is on Detractor’s List of Parnassus Growth Equity Fund

Parnassus Investments, an investment management company, released the “Parnassus Growth Equity Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, the Fund (Investor Shares) returned 4.85% (net of fees) underperforming the Russell 1000 Growth Index’s 7.07% gain. For the year, the fund returned 26.85% compared to Russell 1000 Growth’s 33.36% return. In addition, please check the fund’s top five holdings to know its best picks in 2024.

In its fourth quarter 2024 investor letter, Parnassus Growth Equity Fund emphasized stocks such as NVIDIA Corporation (NASDAQ:NVDA). NVIDIA Corporation (NASDAQ:NVDA) offers graphics and compute and networking solutions. The one-month return of NVIDIA Corporation (NASDAQ:NVDA) was -16.12%, and its shares gained 28.53% of their value over the last 52 weeks. On March 19, 2025, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $117.52 per share with a market capitalization of $2.87 trillion.

Parnassus Growth Equity Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2024 investor letter:

“NVIDIA Corporation (NASDAQ:NVDA) continued to lead the market for graphics processing units and semiconductor chips needed to power AI applications. Because our position in the stock is an underweight relative to the nearly 12% of the benchmark it now represents, it was a relative detractor for the year.”

NVIDIA (NVDA) Price Target Cut, Next-Gen Blackwell GPU Incoming

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 30 Most Popular Stocks Among Hedge Funds. As per our database, 223 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the fourth quarter which was 193 in the previous quarter. NVIDIA Corporation (NASDAQ:NVDA) reported another record quarter in fiscal Q4 2025 with $39.3 billion in revenues, representing a 78% year-over-year increase and 12% sequential growth. 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 best stocks that members of Congress own. In addition, please check out our hedge fund investor letters Q4 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.