Nvidia shares fell slightly in early trading Thursday as traders reviewed a series of regulatory filings updating the holdings of some of the world's largest investors in the market-leading artificial intelligence chipmaker.
Nvidia (NVDA) The stock, which fell 4.4% in the quarter after its surprise first-half gain of around 150%, remains one of the market's key sentiment barometers heading into the final months of the year as investors await its second-quarter earnings later this month to cement the ai demand story.
Some of Wall Street’s biggest investors, however, appear to be looking elsewhere for their exposure to ai trading, although many of the top funds that appeal to retail, retirement and index-tracking investors continue to add the name to their portfolios, according to the latest batch of 13-F filings with the Securities and Exchange Commission.
Mutual funds with more than $100 million in assets must notify the SEC of changes in their portfolios.
The reports, known as 13-F filings, date back to the end of the previous quarter and while they don't include the full extent of holdings or potential bets against a particular security, they do provide insight into the strategies of some of the world's biggest investors.
Big names cut stakes in Nvidia
Three big names appear to have reduced their exposure to Nvidia last quarter, including David Tepper's Appaloosa Management, which dumped about 3.7 million shares, or 84.4% of its holdings, during the three months ended in June.
The stock now accounts for about 1.4% of his $17.3 billion portfolio.
Stanley Druckenmiller's Duquesne Family Office dumped about 1.5 million Nvidia shares, representing about 88% of its holdings on the stock, while activist investor Elliott Management sold a small 50,000-share stake in the chipmaker.
Soros Fund Management, the investment vehicle founded by billionaire investor George Soros, also exited Nvidia, selling about 217,000 shares.
Related: Top analyst puts Nvidia stock on key list after $500 million drop
On the buy side, State Street purchased $76.6 million worth of Nvidia shares, and the stock now represents the second-largest holding in its $2.29 trillion portfolio, behind Microsoft. (MSFT) .
Meanwhile, Vanguard added $11.4 million worth of Nvidia shares, making it the third-largest holding, while BlackRock bought a net $16.9 million worth of shares, making Nvidia the second-largest holding (again behind Microsoft) in its massive $4.4 trillion portfolio.
Second-quarter earnings in focus
Nvidia is set to release its highly anticipated second-quarter results on Aug. 28, with analysts expecting its net profit to rise about 137% to 64 cents a share, with revenue doubling from the same period last year to $28.55 billion.
However, investors will be focused on reports that delivery of its newly launched line of Blackwell processors, which are supposed to be faster, cheaper and more efficient than their H100 'Hopper' predecessors, could be delayed due to design flaws.
Analysts had expected Blackwell to generate revenue for Nvidia starting in the third quarter and to reach global customer data centers in the final three months of the year.
Related: Nvidia shares fall amid doubts over key chip
Demand for artificial intelligence, as well as Nvidia's significant market share, is expected to boost the group's data center revenue to $150 billion next year, driven largely by the launch of Blackwell this year.
Some analysts are also starting to question the pace of ai spending by hyperscalers like Microsoft and Meta Platforms. (GOAL) amazon (amazon.com) and Google's parent company, Alphabet (GOOGL) and the resulting demand for high-end chips and processors produced by Nvidia.
In fact, hyperscalers, the major providers of massive data centers and cloud services, are poised to spend around $500 billion over the next two years to build out their massive infrastructure, according to Barclays estimates, as they leverage their massive data sets to improve sales of everything from drive-thru restaurants to the most complicated pharmaceutical tests.
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A recent report from S&P Global estimated that ai spending will grow by more than 20% through 2028, at which point it will account for about 14% of all IT spending — a level that would be more than double its 2023 total.
“Cloud giants are investing heavily in ai “Despite uncertain monetization timelines, combined capital spending across Microsoft, Alphabet and Meta was up 60% year-over-year,” said S&P Global CTO Christian Frank.
Nvidia shares were last trading down 0.6% in pre-market trading, indicating an opening price of $117.38 each.
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