Nvidia's Meteoric Rise: Hedge Funds Adjust Holdings as Analysts Forecast Rebound

As of last week, Nvidia (NVDA) rose by 1.40%, marking a five-day winning streak and an impressive 18.93% gain over the last five days. Over the past week, the stock has surged 18.93%, and year-to-date, it has climbed 151.64%, positioning its latest market capitalization at ¥3064.668 billion.

According to Securities and Exchange Commission (SEC) disclosures, the world's largest hedge fund, Bridgewater Associates, submitted its second-quarter holdings report as of June 30, 2024. Nvidia (NVDA.US) ranked fourth in Bridgewater's top holdings, with approximately 6.56 million shares valued at around $810 million. This represented 4.23% of the fund's portfolio and marked a 6.95% reduction in shares from the previous quarter.

Meanwhile, Singapore's state-owned investment firm Temasek significantly increased its stake in Nvidia during the second quarter, as noted in its recent SEC filing. Temasek's holdings in Nvidia surged by 87.96% from the previous quarter, now comprising roughly 9.70 million shares valued at approximately $1.20 billion. This boost positions Nvidia fourth among Temasek's top five holdings, as part of a broader $33 billion investment across six leading tech companies, including Nvidia.

The past six weeks have been a rollercoaster for Nvidia investors, enduring historic declines leading to substantial market capitalization erosion. Nonetheless, Nvidia's stock has rebounded significantly over the past four days, signaling that the worst may be over.

Market analysts continue to voice strong support for Nvidia despite recent volatility. Bank of America and UBS suggest that the recent downturn in the semiconductor sector is overblown. Vivek Arya from Bank of America identifies Nvidia as one of the top candidates for a rebound and anticipates a sector-wide recovery by the end of 2024. Likewise, John Vinh from KeyBanc Capital Markets suggests Nvidia will surpass earnings guidance, emphasizing ongoing demand isn't expected to be a concern.

Despite worries surrounding the delay in Nvidia's new Blackwell B200 chip, which is now expected to roll out in the first quarter of next year, the company maintains confidence. Nvidia assures that strong demand for its Hopper chips and an unchanged production schedule for Blackwell mitigate the potential revenue impact.

UBS analyst Timothy Arcuri reinforces this optimism, citing a limited shipping delay between four to six weeks for Blackwell chips. He maintains a "buy" rating on Nvidia with a target price of $150. Arcuri highlights that Nvidia’s long-term outlook remains robust, driven by expanding AI lab investments and growing enterprise demand.

In summary, Nvidia's recent stock performance suggests resilience amid short-term challenges, bolstered by strong institutional support and market confidence in its long-term growth trajectory.