Nvidia(NASDAQ: NVDA) has long been the darling of the stock market, riding high on the AI wave. Nevertheless, whispers of skepticism are growing louder as hedge funds trim their positions in the tech giant.
The second quarter saw a continued shedding of Nvidia shares by 326 hedge funds, juxtaposed against 264 funds increasing their stakes. This shedding of shares, concurrent with Nvidia’s meteoric rise to an all-time high market cap following a stock split in June, signals a shifting sentiment among investors.
Apple: A Reliable Haven
It comes as no surprise that hedge funds turned to Apple(NASDAQ: AAPL) as an alternative investment. With Warren Buffett’s Berkshire Hathaway counting Apple as its largest holding and the tech giant reigning as the world’s most valuable company, investor confidence in Apple remains steadfast.
Although Apple seemed to lag behind in AI, the unveiling of its cutting-edge Apple Intelligence platform, equipped with sophisticated AI features such as a writing assistant and image manipulation tools, revitalized its standing. Not to be overlooked is Apple’s unparalleled advantage in AI – a colossal installed base of over 2 billion devices, ensuring broad exposure for its software and services.
Among those shifting from Nvidia to Apple is GQG Partners, a Floridian investment firm that sold almost 40% of its Nvidia shares while acquiring 11.3 million Apple shares. Ken Griffin’s Citadel Advisors also opted to reduce Nvidia exposure in favor of Apple, purchasing 2.6 million Apple shares worth approximately $500 million in the quarter.
Lyft’s Resurgence: A Surprising Bet
On a less predictable note, hedge funds are showing renewed interest in Lyft(NASDAQ: LYFT). The second-largest ride-sharing service, Lyfts’ shares faltered post-IPO due to lofty valuations and pandemic disruptions. However, recent shifts in management strategy, including cost reductions and new offering rollouts like selective pairing for female riders and drivers, have reignited investor optimism.
Impressively, Lyft recorded a 41% uptick in revenue to $1.44 billion during the second quarter, coupled with a notable GAAP profit. This resurgence didn’t go unnoticed by billionaire investors like David Tepper’s Appaloosa Management and Griffin’s Citadel Advisors, both increasing their stakes in Lyft while reducing Nvidia positions.
Although Lyft and Apple differ significantly, the strategic moves by prominent investors and the positive trajectory of Lyft’s turnaround are encouraging signals for retail investors eyeing the stock. As financials continue to strengthen, the potential for significant upside is unmistakable.
Before leaping into Nvidia stock, consider this:
The Motley Fool Stock Advisor team recently unveiled their top 10 stocks for investors, excluding Nvidia. These picks are poised to deliver substantial returns in the coming years.
Reflect on Nvidia’s journey in 2005 – a $1,000 investment back then would have grown to a staggering $792,725 today.*
Empowering investors with actionable insights and top-notch guidance, the Stock Advisor service stands as a beacon of investment wisdom, trumping the S&P 500’s performance since 2002.
*Stock Advisor returns as of August 22, 2024