Why Some Ultra-Rich Are Becoming Wary of Betting on Nvidia?

Since the boom of artificial intelligence (AI), Nvidia has become the top pick of the investment world, and with its outstanding AI chip products, its stock price has soared, and its market value has once broken through $3 trillion.

However, according to an asset allocation report recently released by Tiger 21, more than half of the organization's members do not invest in Nvidia.

Tiger 21 is a super-rich investor club in the United States composed of ultra-high-net-worth investors and entrepreneurs.

The organization's second-quarter asset allocation report shows that 57% of its members do not invest in the chip favorite Nvidia. Most members who choose to stay away from the stock say they have no intention of establishing a position in the company.

Michael Sonnenfeldt, chairman of the Tiger 21 super-rich club, said: While Nvidia is the undisputed leader in AI at the moment, no company's growth lasts forever, and competitors often catch up, leading to a recalibration of the market.

It is understood that the organization was founded by Sonnenfeldt in 1999, and members share advice on wealth preservation, investment, and philanthropy. Tiger 21 has 123 branches in 53 markets. The organization has more than 1450 members. According to data provided by Sonnenfeldt, the personal assets of its members total more than 165 billion US dollars.

It is reported that even among the 43% of members who invest in Nvidia, most people do not intend to increase their holdings, fearing that it has risen too high.

These concerns seem to be well-founded. On Tuesday, Nvidia's stock price plummeted by 9.53%, and its market value evaporated by about $279 billion in a single day, setting a new record for the US stock market. At the same time, the US market also saw a general sell-off.

A significant proportion of investors surveyed expect that Nvidia's success will not continue in the next decade.

Sonnenfeldt said that some members choose to completely avoid technology stocks, and their portfolios do not include Nvidia's shares, preferring real estate or other industries.

For others, it is due to the nature of tech investing today, he said. Tiger 21 members watched Tesla rise only to now have almost all major auto manufacturers offer an EV, so while Nvidia is the leader today, some Tiger 21 members believe it is only a matter of time before the competition catches up.

Sonnenfeldt also said that the club's members are more focused on preserving wealth rather than pursuing high returns.

They could be avoiding Nvidia due to its volatility and the risks associated with tech investments, despite its impressive growth, he added.