5 Stocks Most Bought By Hedge Funds

In this article, we discuss 5 stocks most bought by hedge funds. If you want to read our discussion on the stock market landscape and the performance of popular hedge funds, head directly to 12 Stocks Most Bought By Hedge Funds. 

5. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 173

NVIDIA Corporation (NASDAQ:NVDA) is one of the most owned stocks by hedge funds. On February 28, BofA observed that Nvidia’s dominance in the data center sector is on the rise, with over 85% of its total sales expected to come from this segment, a significant increase from 25% five years ago. In Q4 2023, Nvidia sold over 900,000 GPU silicon units, more than double the previous year’s figure, capturing 95% of the market share. The Hopper and H100/HGX platform played a major role in Nvidia’s data center revenue. Bank of America analyst Vivek Arya maintained a Buy rating on NVIDIA Corporation (NASDAQ:NVDA), anticipating continued growth in the nearly $90 billion accelerator market.

According to Insider Monkey’s fourth quarter database, 173 hedge funds were bullish on NVIDIA Corporation (NASDAQ:NVDA), compared to 180 funds in the prior quarter. Rajiv Jain’s GQG Partners is a significant position holder in the company, with 13.90 million shares worth $6.8 million. 

SaltLight Capital stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its fourth quarter 2023 investor letter:

“We were fortunate to have some exposure to some of the ‘Magnificent Seven’ – Amazon, NVIDIA Corporation (NASDAQ:NVDA), Meta Platforms and Google (although in aggregate, we still hold a smaller weighting than the S&P 500).

While we are cautious in AI infrastructure, we do think there are mispriced opportunities in areas of application software where AI can be infused to make a step change improvement. Posted in our office is this chart that ASML provides at each of its investor days. This chart is a little outdated from 2021, but we think illustrates how value (in operating profit) was distributed across semiconductors, hardware, and then software & services. It’s very clear that most of the economic value in the past has accrued to the software services (in gray) built on the backs of highly technical companies run by extremely smart people.

Why is this? We think it is due to a combination of distribution and network effects. Our working hypothesis right now is that this will likely remain a similar outcome in the AI epoch. One outlier right now is Nvidia which is capturing 80% margins..” (Click here to read the full text)