Generation Investment Management, an investment management firm, released its “Global Equity Strategy” second quarter 2024 investor letter. A copy of letter can be downloaded here. The strategy’s recent net performance was behind market averages. Since the fund’s inception, the strategy has underperformed for about 8% of the time on a rolling five-year basis. Several factors have contributed to the current underperformance, including not owning Nvidia, which explains about a third of the relative underperformance year-to-date. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Generation Investment Management Global Equity Strategy highlighted stocks like NVIDIA Corporation (NASDAQ:NVDA), in the second quarter 2024 investor letter. NVIDIA Corporation (NASDAQ:NVDA) offers graphics and compute and networking solutions. The one-month return of NVIDIA Corporation (NASDAQ:NVDA) was 12.44%, and its shares gained 179.06% of their value over the last 52 weeks. On September 30, 2024, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $121.44 per share with a market capitalization of $2.979 trillion.
Generation Investment Management Global Equity Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“Recent net performance is behind market averages. However since the fund’s inception, we have spent only about 8% of the time underperforming on a rolling five-year basis.1 We do not enjoy these spells. A number of different factors has contributed to the current period of underperformance. The fact that we do not own NVIDIA Corporation (NASDAQ:NVDA) is one. That single company accounted for roughly 25% of returns in the benchmark so far this year, meaning almost everyone who does not own Nvidia has lost out. Year-to-date, not owning Nvidia explains about a third of our relative underperformance.
Nvidia is, clearly, an earnings juggernaut. In the past year its revenue has more than tripled, as cloud companies load up on hardware to power AI models. So while its earnings multiple has increased, we are not seeing a repeat of the dotcom mania of the late 1990s. This company’s valuation is backed by cold, hard cash…” (Click here to read the full text)
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA) is in 5th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 179 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the second quarter which was 186 in the previous quarter. NVIDIA Corporation (NASDAQ:NVDA) reported another record quarter in Q2 with $30 billion in revenues, representing a 122% year-over-year increase and 15% sequential growth. While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed NVIDIA Corporation (NASDAQ:NVDA) and shared Billionaire Ken Fisher’s favorite AI stocks for the rest of 2024. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.