4. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 180
NVIDIA Corp (NASDAQ:NVDA) is now a no-brainer stock when it comes to AI picks for 2024. Wedbush’s Dan Ives in December listed Nvidia among his top picks for this year and said:
“We view AI as the most transformative technology trend since the start of the Internet in 1995 and believe many on the Street are still underestimating the $1 trillion of AI spend set to happen over the next decade in a bonanza for the chip and software sectors looking forward with Nvidia and Redmond leading the way.”
Vivek Arya, Bank of America senior semiconductor analyst, recently reiterated a Buy rating and set a $700 price target on NVIDIA Corp (NASDAQ:NVDA) stock. Arya said that estimated FCF of NVIDIA Corp (NASDAQ:NVDA) for 2024 and 2025 is just a small cherry on top of a “very delicious cake”. Arya thinks generative AI is in very early stages and NVIDIA Corp’s (NASDAQ:NVDA) competitive position is “exceptionally strong.”
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.”
