Billionaire Money Managers Are Once Again Piling Into Nvidia Stock, With 2 Notable Exceptions

Second-quarter 13F filings reveal a notable divergence in billionaire investor sentiment towards Nvidia (NVDA). Five prominent fund managers significantly increased their Nvidia holdings, with some reversing prior selling trends, driven by the stock's early April price correction, its sustained competitive advantage in AI GPUs, and lifted China export restrictions. Conversely, two billionaires, Ole Andreas Halvorsen and Paul Singer, reduced their stakes or purchased put options, citing concerns over Nvidia's high valuation, historical tech bubble patterns, and potential future erosion of its AI-GPU scarcity and pricing power. This split highlights varied top-tier investor outlooks on Nvidia's long-term growth and valuation sustainability amidst the ongoing AI revolution.

Analysis

Second-quarter 13F filings reveal a significant divergence in institutional sentiment regarding Nvidia, with prominent billionaire-led funds taking decisively opposing positions. On the bullish side, five major funds, including Coatue Management and Appaloosa, initiated or substantially added to their Nvidia holdings. This buying was catalyzed by the stock's approximate 40% price correction between January and early April, which presented an opportunistic entry point. These investors appear to be underwriting Nvidia's durable competitive advantages, specifically the market dominance of its Hopper and Blackwell GPUs, its accelerated annual chip release schedule, and the recent lifting of export restrictions to China for its H20 chip. Conversely, a bearish perspective is evident from Viking Global Investors' 44% stake reduction and Elliott Investment Management's purchase of 2.58 million put contracts. This pessimistic outlook is rooted in valuation concerns, with Nvidia's price-to-sales ratio approaching 30, a level historically associated with valuation ceilings for high-growth technology firms. The bearish case also anticipates the eventual erosion of Nvidia's pricing power and high gross margins as AI-GPU scarcity wanes due to emerging competition and in-house chip development by its largest clients, reflecting a historical pattern where early-stage tech bubbles eventually correct.

Key Decisions for Investors

• Given the clear split in top-tier investor sentiment, it is critical to monitor future 13F filings from these same funds for any signs of a developing consensus or thesis change.
• Investors should weigh Nvidia's strong fundamental outlook, including its accelerated innovation timeline and market leadership, against its premium valuation, specifically the P/S ratio near 30, which bear-side managers view as a historical ceiling.
• The primary risk highlighted by bearish investors is the potential erosion of AI-GPU scarcity; therefore, tracking competitive product launches and the progress of in-house chip development by Nvidia's key customers is essential.
• The article notes that a ~40% price swoon acted as a key buying catalyst for major funds, suggesting that investors considering a position could view significant pullbacks as potential entry opportunities.