US-China Semiconductor War: 5 Stocks to Watch

2. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 84

NVIDIA Corporation (NASDAQ:NVDA), an IT company, offers graphics, and compute and networking solutions. The company operates in the US, Taiwan, China, and internationally.

Vijay Rakesh, an analyst at Mizuho, holds a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) shares as of September 15. The analyst also placed a $205 price target on the stock.

The US Commerce Department’s newest rules and restrictions on semiconductor trades have instructed companies including NVIDIA Corporation (NASDAQ:NVDA) to halt their shipments to China. The company needs to acquire a license to trade in China, especially if its shipments include artificial intelligence computing chips.

There were 84 hedge funds long NVIDIA Corporation (NASDAQ:NVDA) in the second quarter, and 102 hedge funds long the stock in the previous quarter. Their total stake values were $3.3 billion and $6.4 billion respectively.

Baron Funds, an asset management firm, mentioned NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2022 investor letter. Here’s what it said:

“At the company-specific level, there was a broad correction across the entire portfolio. While four of our holdings contributed to performance, the contribution to absolute returns was less than 100bps combined, as unfortunately none of them were large enough to move the needle. We had 16 investments detracting over 100bps each with NVIDIA (NASDAQ:NVDA), our second largest detractor, costing the Fund 254bps.

NVIDIA’s stock was hit even harder, down 44.4%, impacted by concerns over the health of the consumer, dramatic declines in crypto, and COVID-related lockdowns in China. Despite the sell-off and the increased near-term volatility in its gaming business, NVIDIA’s revenues grew 46% year-over-year with 48% operating margins, driven by continued strength in its data center business as companies across industries adopt AI and ML…” (Click here to see the full text)