We recently published a list of Top 10 Stocks to Buy According to Adage Capital Management. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other top stocks to buy according to Adage Capital Management.
Adage Capital Management, based in Boston, is a major investment firm specializing in managing the broader market’s assets, with a strong focus on Endowments and Foundations. Among its prominent clients are institutions such as Harvard University, Dartmouth College, Northwestern University, the American Red Cross, and the Getty Foundation. Over the last 15 years, Adage and its predecessor, the Select Equity Group at Harvard Management Company, have consistently surpassed the wider market’s performance by an average of 3.5%.
The firm’s origins date back to the mid-1980s when co-founders Phillip Gross and Robert Atchinson met as investment analysts for Harvard’s endowment. In the 1990s, following controversy over large performance bonuses at Harvard Management, they, along with an 18-person team, left to establish Adage Capital Management. Their launch was backed by a $1.8 billion initial investment from Harvard, with an agreement that the university would receive 10% of Adage’s earnings.
Adage Capital Management primarily manages the broader market’s assets for endowments and foundations, utilizing a long/short equity strategy driven by fundamental analysis. The firm also explores risk arbitrage and event-driven investment opportunities when suitable.
Phillip Gross, more commonly known as Phill Gross, co-founded Adage Capital Management, L.P. in 2001 and serves as a Managing Director and Healthcare Portfolio Manager. Before establishing the firm, he spent 18 years at Harvard Management Company, Inc., where he held roles as a Healthcare and Retail Analyst, Equity Research Director, and Partner.
Gross earned both his B.S. in finance and economics in 1982 and M.S. in investments in 1983 from the University of Wisconsin. He previously served on the UW Foundation Board of Directors and is currently involved with the Steve Hawk Center for Applied Securities Analysis Advisory Board and the Nicholas Center for Applied Corporate Finance Advisory Board. In 2006, he was honored with the Distinguished Alumnus Award from the UW Business School.
In philanthropy, Gross co-founded Strategic Grant Partners, an initiative aimed at systemic change in education and family services in Massachusetts. He serves as Vice President of the Board of Directors for Youth Enrichment Services, a Boston-based organization that introduces urban youth to outdoor activities. Additionally, he is a Board Trustee of the U.S. Ski and Snowboard Association, vice-chair of its Investment Committee, and a board member of the T2 Foundation.
Adage Capital Management’s Q4 2024 13F filing reported $57.19 billion in managed 13F securities, with its top 10 holdings accounting for 31.7% of the total portfolio. This distribution highlights the firm’s diversified investment approach.
Our Methodology
The stocks discussed below were picked from Adage Capital Management’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from over 1,000 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders as of Q4: 223
Adage Capital Management’s Equity Stake: $3.1 Billion
NVIDIA Corporation (NASDAQ:NVDA) has been the dominant force in the AI boom, with its stock surging over 600% since early 2023 and its market capitalization nearing $3 trillion. However, the stock has shown vulnerability, down about 16% year to date and 27% from its peak, despite beating Q4 earnings expectations with 78% revenue growth to $39.3 billion. For the quarter ending January 2025, the company reported revenue of $39.3 billion, representing a 12% sequential increase and an extraordinary 78% year-over-year growth. A primary contributor to this success was Nvidia’s data center segment, which surged by 93% year-over-year, solidifying its position as a key driver of long-term growth. While Nvidia experienced a 150-basis-point sequential decline in gross margins due to higher costs associated with Blackwell’s rollout, its adjusted gross margin of 73.5% remained within guidance, demonstrating strong financial management.
On March 10, 2025, Melius Research analyst Ben Reitzes reaffirmed his Buy rating on NVIDIA Corporation (NASDAQ:NVDA) but lowered his two-year price target from $195 to $170, citing short-term challenges such as potential tariffs, regulatory restrictions, and cost-reducing advancements in computing. Reitzes noted that the uncertainty surrounding the AI sector has led to erratic stock movements, with Nvidia shares reflecting broader market confusion. However, the upcoming GTC conference in San Jose, where CEO Jensen Huang will deliver a keynote on March 18, is expected to be a significant event that could influence investor sentiment and serve as a potential catalyst for the stock.
Looking ahead, NVIDIA Corporation (NASDAQ:NVDA) remains confident in its growth trajectory, projecting revenue of $43 billion for the April quarter—a 9% sequential increase and a 65% rise year-over-year. This outlook surpasses analyst expectations of $42.1 billion, reinforcing the company’s strong market position and continued ability to drive demand for AI and data center solutions. With its leadership in next-generation computing and robust financials, Nvidia remains a top stock to buy despite short-term market concerns.
Overall, NVDA ranks 2nd on our list of top stocks to buy according to Adage Capital Management. While we acknowledge the potential for NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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 the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
