Here’s Why L1 Capital International Invested in Nvidia (NVDA) Late

L1 Capital, an investment management firm, released its “L1 Capital International Fund” (unhedged) third quarter 2025 investor letter. A copy of the letter can be downloaded here. In the September quarter, a few sectors and a few companies dominated the market. The fund returned 2.6% in the September quarter compared to 6.1% for the benchmark (MSCI World Net Total Return Index in AUD). In addition, you can check the fund’s top 5 holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, L1 Capital International Fund 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 -4.86%, and its shares gained 34.77% over the last 52 weeks. On December 11, 2025, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $180.93 per share, with a market capitalization of $4.4 trillion.

L1 Capital International Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its third quarter 2025 investor letter:

“We also made an initial investment in NVIDIA Corporation (NASDAQ:NVDA). We discussed Nvidia in detail in our September 2024 Quarterly Report. Nvidia has continued to benefit from the development of AI more than any other business and is now the largest business in the world by market capitalisation. An obvious question is why have we only recently invested in Nvidia after the share price and market capitalisation has increased so much already? The short answer is that while we have followed Nvidia closely for years, and the company has been on our Bench of potential investments, we have materially underestimated both the growth in AI, the size of the addressable market, and Nvidia’s associated growth and profitability. Recent industry developments indicate that the growth and commercial success of AI is likely to be even larger and faster than we previously estimated. Applying our investment process and internal language of ‘what you need to believe’, in our assessment Nvidia provided a sufficiently attractive investment return from our investment price for an initial investment during a brief period of moderate share price weakness.”

Analyst Explains How NVIDIA (NVDA) Can Reach $8 Trillion Market Cap

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 second 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 AI stocks analysts are watching closely. 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.