Hedge funds' love for NVIDIA: Tonight is destined to be crazy

Wallstreetcn
2023.08.23 06:36
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Hedge funds have been increasing their bets on NVIDIA. As of the end of June, their total stake in NVIDIA reached 1.9%, equivalent to a position of over $20 billion.

AI "Behind the Giant" NVIDIA is attracting more and more hedge funds to bet crazily on it.

Goldman Sachs' latest "Hedge Fund Trend Monitor" report shows that hedge funds have been increasing their bets on NVIDIA. As of the end of June, their total ownership stake in NVIDIA reached 1.9%.

The report, compiled by Goldman Sachs based on regulatory filings from 744 hedge funds, covers a total market capitalization of $24 trillion held by these funds, with additional details provided by high-quality brokerage services.

Considering NVIDIA's market value of $1.07 trillion, the hedge funds' 1.9% ownership stake amounts to over $20 billion. Prominent investors in NVIDIA include hedge fund mogul David Tepper's Appaloosa Asset Management, Dan Loeb's Third Point, and Soros Fund Management.

In terms of the number of hedge funds holding NVIDIA, it ranks fifth, behind Microsoft, Amazon, Meta, and Alphabet. However, in terms of stock price performance, NVIDIA has surged over 200% this year, making it the highest gainer among these stocks.

Furthermore, NVIDIA's weight in Goldman Sachs' popular "Hedge Fund VIP" index has increased. Currently, it stands at 2.86%, up from 2.54% in July.

It is worth mentioning that hedge funds' ownership stake in NVIDIA is not extreme. Goldman Sachs' data shows that hedge funds' total ownership stake in Meta is 3.5%, but they have reduced their bets on almost all other AI-related stocks.

Therefore, for many investment giants, their success in the future will depend on NVIDIA's individual stock. NVIDIA is set to announce its Q2 2024 earnings report tonight (before the opening of the US stock market on Wednesday), covering the three months ending on July 31. It is bound to be an eventful night.

Last weekend, Wall Street Journal pointed out that NVIDIA's Q2 earnings report will be the biggest test for this AI frenzy. Currently, analysts have very high expectations for NVIDIA's earnings report, but if NVIDIA fails to meet its targets, it could severely hinder the AI boom and impact tech giants from Microsoft, Google, Meta, to long-time rival AMD.

NVIDIA's Q1 revenue was $7.192 billion, higher than the company's guidance range of $6.37 billion to $6.63 billion, but down 13% YoY. Analysts expect a YoY decline of 21.5% to $6.52 billion. In the previous quarter, Q4, revenue declined 21% YoY. NVIDIA expects Q2 revenue to exceed $11 billion, with a YoY growth of "over 50%".

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