Despite its dominance in the AI industry, Nvidia Corp. NVDA is not a favored investment for over half of the members of the ultra-wealthy network, Tiger 21.
What Happened: As per the network's second-quarter asset allocation report, 57% of Tiger 21 members have chosen not to invest in Nvidia. The report suggests that a majority of these members do not plan to initiate a position in the company, CNBC reported on Wednesday.
Michael Sonnenfeldt, chairman of Tiger 21, explained, “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.”
Despite the Jensen Huang-led company’s impressive growth and its $3 trillion market cap earlier this year, the stock has experienced a downturn.
Furthermore, 43% of Tiger 21’s members who have invested in Nvidia do not intend to add more stock, citing concerns that the stock has already peaked.
Why It Matters: Nvidia’s future looked promising as it was projected to surge to a $10 trillion valuation. However, just days later, the company received a subpoena from the U.S. Department of Justice (DOJ) over potential antitrust violations, causing a drop in its stock price. This was followed by a cautionary note from Jim Cramer, advising against panic selling but acknowledging that Nvidia’s stock could go lower.
Price Action: At the time of writing, Nvidia was trading 2.42% lower at $105.39 during the after-hours, after closing at $108.00, according to Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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