Talk about a missed opportunity.
A Who’s Who of the greatest hedge fund managers have unloaded the vast majority of their substantial holdings in Nvidia over the past few quarters. As a result, they missed out on huge gains from the surging stock of the premier artificial intelligence chip giant, which over the past two to three years has been a top-performing stock.
In 2023 alone, Nvidia was the best performer, with its stock growing by more than three times. In the past four years or so, it has swelled by more than 11 times. And it is up a further 90 percent-plus through mid-May — despite dropping on Friday — after surging another almost 90 percent over the past six months. Now investors are nervously awaiting Nvidia’s quarterly earnings report, scheduled to be released after the stock market closes on Wednesday.
Yet several billionaire hedge fund managers missed out on most of the recent moves.
For example, Philippe Laffont’s Coatue Management cut its stake by 68 percent in the first quarter, to about 1.4 million shares. Nvidia is now the Tiger Cub’s seventh-largest U.S.-listed long position, though as recently as the end of the third quarter, it was the firm’s biggest. Since then, Coatue has pared its position by 3.16 million shares. That’s a lot of missed profits.
Nvidia was also the largest U.S.-listed common stock long for Steven Cohen’s Point72 Asset Management at the end of third-quarter 2023, with nearly 1.65 million shares. Cohen sold more than 1 million shares in the fourth quarter and more than 304,000 shares in the first quarter. Altogether, he unloaded roughly 70 percent of his stake over the six months, and Nvidia is no longer a significant position for his multistrategy firm.
Stanley Druckenmiller’s Duquesne Family Office bailed on the stock during the same period. Druckenmiller reduced his position by more than 70 percent in the most recent quarter, after having trimmed it by about 15 percent in the fourth quarter — a total of 80 percent of his stake. The stock at this point is the family office’s sixth-largest U.S. common stock long after having been the largest or second largest for a big part of last year.
David Tepper’s Appaloosa Management has also been dumping shares of Nvidia. It sold 23 percent of its stake in the fourth quarter and an additional 44 percent in the first quarter, totaling about 60 percent of its stake. Nvidia is now the firm’s fifth-largest U.S. long, accounting for nearly 6 percent of the U.S. stock portfolio.
Even Renaissance Technologies, a computer-driven firm founded by Jim Simons — who died last week — has been bailing on the stock. It sold 64 percent of its position in the fourth quarter and 70 percent of the stake it had held at the end of second-quarter 2023.
But not every high-profile hedge fund manager has abandoned Nvidia’s stock. Several were big buyers in the first quarter.
For example, Alex Sacerdote’s Whale Rock Capital Management enlarged its stake by more than 62 percent. The stock is now the hedge fund firm’s largest U.S. long, accounting for more than 10 percent of U.S. common stock assets. ExodusPoint Capital Management boosted its stake roughly fivefold, making Nvidia the multistrategy firm’s largest U.S.-listed common stock long position. And Chris Hansen’s Valiant Capital Management increased its stake by 90 percent in the first quarter. Nvidia is now the Tiger Grandcub’s sixth-largest U.S. common stock long.
“The investment team has . . . recently become more bullish on the future of AI infrastructure,” Hansen told clients in his first-quarter letter, obtained by Institutional Investor. “Despite this appearing to be a somewhat consensus view, we think that most investors are vastly underestimating the scale of investment required.”
