Veteran fund manager who predicted Nvidia stock rally makes surprising move

Nvidia shares surged to a record $157.75, making it the world's most valuable company at $3.85 trillion, driven by robust Q1 results, strong AI chip demand, and easing U.S.-China trade tensions, despite ongoing revenue impacts from export controls. Amidst this rally, veteran fund manager Chris Versace, who had previously predicted the stock's ascent, notably trimmed 10% of his Nvidia holdings to lock in over 100% gains, citing a "disciplined investor" approach while maintaining a bullish long-term outlook on AI and data center growth.

Analysis

Nvidia (NVDA) has re-established itself as the world's most valuable company with a market capitalization of approximately $3.85 trillion, following a five-day rally that pushed its stock to a record high of $157.75. This marks a significant 67% recovery from its April low, driven by a confluence of positive catalysts. The company's fiscal first-quarter results surpassed expectations, with adjusted earnings of 96 cents per share on $44.06 billion in revenue, beating forecasts of 93 cents and $43.31 billion, respectively. This fundamental strength was amplified by improving macroeconomic sentiment, including a temporary pause on tariffs and the scrapping of a Biden-era AI export rule, as well as a new trade deal with China, although its specific impact on semiconductors remains uncertain. However, guidance for the current quarter at $45 billion fell just short of the $45.9 billion consensus, with the company explicitly stating that ongoing U.S. export restrictions to China will suppress potential revenue by approximately $8 billion. Highlighting a tactical response to this environment, veteran fund manager Chris Versace, while remaining long-term bullish, trimmed roughly 10% of his portfolio's Nvidia stake to lock in gains of over 100%, a move he characterized as disciplined profit-taking rather than a change in his fundamental outlook.

Key Decisions for Investors

• Given the stock's significant run-up to all-time highs, investors should consider the disciplined strategy of trimming a portion of their holdings to realize gains and manage portfolio concentration, mirroring the action taken by the fund manager.
• Maintain a close watch on U.S.-China trade negotiations and export control policies, as these factors represent the most significant articulated headwind, directly impacting Nvidia's revenue potential by an estimated $8 billion in the current quarter.
• For long-term holders, the strong Q1 earnings beat and continued AI sector momentum, supported by positive signals from peers like Micron, reinforce the bull case, but this should be weighed against slightly cautious forward guidance and the stock's elevated valuation.