We recently published a list entitled Billionaire Israel Englander’s Top 10 Stock Picks for 2024. Since Nvidia Corp (NASDAQ:NVDA) ranks 4th in the list, it deserves a deeper look.
Billionaire Israel Englander is one of the most notable hedge fund managers in America. He founded Millennium Management back in 1989. Today, the fund’s portfolio is worth over $234 billion. Englander nabbed the top spot in Bloomberg’s list of highest-earning hedge fund managers in 2023, with a whopping $2.8 billion in net earnings including gains from personal investments and fees. Earlier this year, Bloomberg reported that Izzy Englander’s Millennium Management earned $600 million from commodities investments last year. However, in a separate report, the publication said despite installing a new chief of its commodities and making big changes, Millennium’s commodities business is lagging behind Citadel (of billionaire Ken Griffin) which made a whopping $8 billion from commodities in 2022. Bloomberg said, citing sources, that part of the reason why Millennium is struggling to post big gains is billionaire Englander’s imposition of “tight guardrails” to limit losses. To make money in the commodities business, experts say, you have to take risks and give some freedom to traders. But Englander likes to be in control. A Financial Times report earlier this year said Millennium Management manages a whopping $60 billion in assets, employs 5,400 people and has 17 offices. Yet Englander owns 100% of the firm.
The report said, citing a person who works at the fund, that this major concentration is “not a good idea.”
The FT report said Englander’s fund was up 8.3% in 2023 through October, while it returned 12.5% in 2022, 13.6% in 2021 and an impressive 25.9% in 2020.
For this article, we scanned Millennium Management’s Q1 portfolio and picked the fund’s top 10 holdings. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Israel Englander of Millennium Management
Nvidia Corp (NASDAQ:NVDA)
Billionaire Israel Englander’s Stake Value: $1,213,332,896
Nvidia Corp (NASDAQ:NVDA) is getting several bullish calls from the Wall Street lately. Bank of America recently added Nvidia Corp (NASDAQ:NVDA) shares to its US 1 List. The list includes BofA’s best investment ideas consisting of buy-rated stocks trading in the US. Nvidia Corp’s (NASDAQ:NVDA) latest product announcements and its plans revealed at Computex show that the company has much more in its arsenal to power its growth engine. Analysts believe Nvidia Corp’s (NASDAQ:NVDA) shift to new AI architecture known as Rubin (R100) and its powerful H100 and Blackwell chips easily beat competitors.
Nvidia Corp (NASDAQ:NVDA) will start shipping H200 in the second half of this year. At its GTC conference Nvidia Corp (NASDAQ:NVDA) revealed three accelerators – B200, GB200 and GB200 NVL72. All of these products provide growth catalysts for Nvidia Corp (NASDAQ:NVDA) shares and justify its P/E multiple of 71, given the company’s growth expectation of over 100% this year and 32% next year. Based on 2026 EPS estimate set by Wall Street, Nvidia Corp (NASDAQ:NVDA) is trading at a forward P/E multiple of 35.74, which makes the stock’s valuation attractive given the growth catalysts it has.
RiverPark Large Growth Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its first quarter 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA): NVDA shares were our top contributor in the quarter following blowout 4Q results and 1Q guidance driven by strong data center sales. The company reported quarterly revenue of $22.1 billion, up 265% year-over-year, and EPS in the quarter of $5.16, up 487% year-over-year and 12% ahead of expectations. Revenue guidance for 1Q of $24 billion was 8% above very high expectations. The artificial intelligence arms race kicked-off by ChatGPT and Alphabet’s Bard, among others, has generated tremendous demand for Nvidia’s next generation graphic processors.
NVDA is the leading designer of graphics processing units (GPU’s) required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming-focused chip vendor to one of the largest semiconductor/software vendors in the world. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. Following recent results, Jensen Huang, founder and CEO of NVIDIA stated in the company’s press release, “a trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process.”
Overall, Nvidia Corp (NASDAQ:NVDA) ranks 4th on Insider Monkey’s list of Billionaire Israel Englander’s Top 10 Stock Picks for 2024. You can visit Billionaire Israel Englander’s Top 10 Stock Picks for 2024 to see other stocks in the list. While we acknowledge the potential of Nvidia Corp (NASDAQ:NVDA), our conviction lies in the belief that smaller, under the radar 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 more promising than Nvidia Corp (NASDAQ:NVDA) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
