Longriver Partners Fund’s Comment on NVIDIA (NVDA)

Longriver Investment Partners released its “Longriver Partners Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the fund returned 11.7% (net), bringing the year-to-date return to 11.4%. This compares to the benchmark, the MSCI AC World USD Net Index, which returned 11.5% for the quarter and 10.0% year-to-date. The Fund has gained 55.6%, compared to 58.0% for the benchmark, since inception. The investment strategy focuses on harnessing the long-term value created by the holding companies. The fund primarily invests in big tech companies known for consistent performance and have built-in opportunities for profit reinvestment. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second quarter 2025 investor letter, Longriver Partners Fund highlighted stocks such as NVIDIA Corporation (NASDAQ: NVDA). NVIDIA Corporation (NASDAQ:NVDA) offers graphics and compute, and networking solutions. The one-month return of NVIDIA Corporation (NASDAQ:NVDA) was 12.33%, and its shares gained 27.85% of their value over the last 52 weeks. On July 9, 2025, the stock of NVIDIA Corporation (NASDAQ:NVDA) closed at $162.88 per share, with a market capitalization of $3.972 trillion.

Longriver Partners Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2025 investor letter:

“This shift in capex priorities has reopened the debate over compute architectures. Custom silicon promises a way out of NVIDIA Corporation’s (NASDAQ:NVDA) pricing power, especially for inference. But the path is not straightforward.

For hyperscalers, the logic of custom silicon is clear. Nvidia’s pricing power is real and inference costs are spiralling. ASICs offer lower cost, better integration, power efficiency, and more control. But while this sounds ideal on paper, it is hard to deliver in the real world.

Custom chips work best when workloads are stable and scale is extreme. AI is neither. Models have evolved quickly, shifting, for example, from transformers to diffusion, and from instruction-tuned to multimodal. Fixed-function chips, by design, are not built to adapt. If the model shifts, their value evaporates. As one expert put it, “If you spend all this money building something and then you find out the workload changes underneath you, you’re basically stuck…” (Click here to read the full text)

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 Q2 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.