1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Shareholders: 132
Year-to-Date Return (through June 5): 174%
NVIDIA Corporation (NASDAQ:NVDA) has also been extremely popular among smart money managers during the past two quarters, with ownership of the semiconductor titan rising by 48% during that time. Those bulls have been rewarded with exceptional returns of 174% so far this year, making big winners out of funds like David Goel and Paul Ferri’s Matrix Capital Management, which had 20% 13F exposure to NVDA on March 31.
With AI being a strong theme in this article, it’s not surprising that NVIDIA Corporation (NASDAQ:NVDA)’s spectacular returns in 2023 have largely been driven by the overwhelming demand the company has reported for its chips in the use of AI-based applications. Nvidia is projecting $11 billion in revenue during the current quarter, which would smash its previous quarterly record by $2.7 billion. At the heart of that demand is data centers’ burgeoning need for chips to power generative AI and large language models according to CEO Colette Kress. The demand has pushed the company’s data centers visibility out several quarters, setting it up for not just a dominant quarter, but a tremendous finish to its fiscal 2024 year.
The Alger Spectra Fund is bullish on NVIDIA Corporation (NASDAQ:NVDA)’s long-term growth prospects, as detailed in its Q1 2023 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super-computing parallel processing techniques for solving complex computational problems. Simply put. Nvidia’s computational power is a critical enabler of Al and therefore critical to Al adoption, in our view. As such, we believe Nvidia is a long-term high unit volume growth opportunity. During the period, NVIDIA reported fiscal fourth-quarter results that met expectations, as the company navigated. through an inventory correction associated with the broad macroeconomic slowdown. Moreover, management gave fiscal year earnings guidance that was better than analyst estimates. noting strong year-over-year growth in gaming and data centers. Management’s constructive assessment of 2023 prospects. coupled with the rapid rollout and adoption of generative Al offerings, led to positive share price performance.”
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