Parnassus Growth Equity Fund Benefitted From its Underweight Exposure in NVIDIA Corporation (NVDA)

Parnassus Investments, an investment management company, released the “Parnassus Growth Equity Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here.  In the third quarter, the Fund (Investor Shares) returned 3.29% (net of fees) outperforming the Russell 1000 Growth Index’s 3.19% gain. Stock selection in the Health Care sector primarily drove the portfolio’s outperformance. Also, overweight position and stock selection in the Financials sector buoyed the gains. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Parnassus Growth Equity Fund highlighted stocks like NVIDIA Corporation (NASDAQ:NVDA), in the third 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 -7.66%, and its shares gained 180.88% of their value over the last 52 weeks. On November 26, 2024, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $135.07 per share with a market capitalization of $3.399 trillion.

Parnassus Growth Equity Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2024 investor letter:

“NVIDIA Corporation (NASDAQ:NVDA) shares finished the quarter with a negative return, so our underweight (yet still large) position was a relative contributor. Although the semiconductor company released robust quarterly sales figures and issued encouraging guidance for the current quarter, its stock declined amid investor skepticism that its rapid pace of growth can continue.”

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, 193 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the third quarter which was 179 in the previous quarter. NVIDIA Corporation (NASDAQ:NVDA) reported another record quarter in Q3 with $35.1 billion in revenues, representing a 94% year-over-year increase and 17% 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 trending AI stocks on latest news and ratings. In addition, please check out our hedge fund investor letters Q3 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.