Sustainable Growth Advisers (SGA), an investment management company, released its third-quarter investor letter for its “U.S. Large Cap Growth Strategy.” A copy of the letter can be downloaded here. The portfolio returned -1.3% (Gross) and -1.4% (Net) in the third quarter, compared to a 10.5% return for the Russell 1000 Growth Index and an 8.1% return for the S&P 500 Index. SGA’s investment objective is to invest in high-quality growth businesses expected to achieve consistent mid-teens earnings growth, accompanied by stable revenue and cash flow. However, in Q3, the market leadership was adverse for SGA’s investment style as lower-quality stocks and cyclical industries outperformed. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, the SGA U.S. Large Cap Growth Strategy highlighted stocks such as NVIDIA Corporation (NASDAQ:NVDA). NVIDIA Corporation (NASDAQ:NVDA) offers graphics, compute, and networking solutions. The one-month return for NVIDIA Corporation (NASDAQ:NVDA) was 1.70%, and its shares gained 34.84% over the last 52 weeks. On December 31, 2025, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $186.50 per share, with a market capitalization of $4.53 trillion.
SGA U.S. Large Cap Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its third quarter 2025 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) was a contributor to the portfolio’s performance again in Q3, driven by continued surging demand for accelerated computing and AI infrastructure. With management projecting total infrastructure spend of $3-4 trillion in the future, the company’s long-term outlook remains compelling, and we continue to see double digit revenue and earnings growth in the years ahead. The company announced a $5 billion investment into Intel, with joint product development efforts that will strengthen Nvidia’s AI infrastructure platforms and blunt competitive threats from custom programs at cloud service providers and AMD. Toward the end of the quarter, the company also announced an unprecedented deal with OpenAI. Our numbers and expectations in the context of OpenAI are somewhat modest as there is a lot that needs to be proven here, starting from funding to business use cases and eventual revenue models. Despite that, we remain excited about the overall opportunity for Nvidia.
Nvidia’s business in China remains uncertain with ambiguity imposed by tariffs, reception by the Chinese government and related geopolitical tensions. Management did share their forward guidance by keeping this portion of the business separate, suggesting further upside if export restrictions ease. Nvidia’s leadership in high-performance GPUs, full-stack software ecosystem, and growing exposure to recurring revenue streams increases our confidence in its growth trajectory. We maintained an above-average weight, adding to the position as the growth runway becomes more visible.”
NVIDIA Corporation (NASDAQ:NVDA) is in 5th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 234 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the third quarter, compared to 235 in the previous quarter. In the third quarter of fiscal 2026, NVIDIA Corporation (NASDAQ:NVDA) reported $57 billion in revenues, marking a 62% year over year growth. While we acknowledge the risk and potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVIDIA Corporation (NASDAQ:NVDA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered NVIDIA Corporation (NASDAQ:NVDA) and shared the list of stocks Jim Cramer recently discussed.. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
