5 Most Famous Hedge Fund Managers and Their Top Stock Picks

4. Steve Cohen

Top Stock Pick: NVIDIA Corp (NASDAQ:NVDA)

Billionaire Steve Cohen founded S.A.C. Capital Advisors in 1992. But the fund in 2013 pleaded guilty to insider trading charges and paid $1.8 billion in penalties. It was barred from further operations. In 2014, Cohen launched Poiint72 Asset Management. The hedge fund reportedly gained 10.6% in 2023, lagging behind the S&P 500 performance.

Point72’s top holding as of September 2023 was NVIDIA Corp (NASDAQ:NVDA), in which the fund had a $716 million stake. As of the end of the third quarter of 2023, 180 hedge funds reported having stakes in NVIDIA Corp (NASDAQ:NVDA).

In its fourth quarter 2023 investor letter, ClearBridge Large Cap Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA):

“Much of that differential can be attributed to the performance of the Magnificent Seven (Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia and Tesla), a basket of mega cap growth stocks that accounted for 47.8% of the benchmark return for the quarter and 65.4% for 2023.

The ClearBridge Large Cap Growth Strategy maintains exposure to six of the seven stocks, with overweights in Amazon.com, Meta and NVIDIA Corporation (NASDAQ:NVDA). Those three stocks, as well as Microsoft, were among the leading contributors to Strategy performance for the quarter. Microsoft and Nvidia continued to be supported by strong execution and leadership positions in the implementation of generative artificial intelligence (AI).

These are high-quality, cash flow generative businesses that we will continue to own, actively adjusting our positioning sizes based on risk/reward and portfolio construction priorities. With Nvidia shares more than tripling in 2023, we opportunistically took profits throughout the year, an approach that continued in the fourth quarter with additional trims that brought the position down to 6% of overall assets.

Active management of our mega cap exposure contributed to the Strategy outperforming the benchmark both in the fourth quarter and through the narrow leadership market of 2023. We also attribute these improved results to solid stock picking, being opportunistic in adding to or initiating new positions in growth companies at or near the bottom of their earnings cycle, and maintaining a commitment to diversification across our three buckets of growth: select, stable and cyclical.”