Nvidia Corp (NVDA): Steve Cohen’s AI Stock Pick?


Nvidia Corp (NVDA): Steve Cohen's AI Stock Pick?
Nvidia Corp (NVDA): Steve Cohen's AI Stock Pick?

Nvidia Corp (NVDA): Best AI Stock to Buy According to Billionaire Steve Cohen?

Billionaire Steve Cohen is a well-known hedge fund manager. He often dazzles with his outperformance and smart bets. Cohen also owns The New York Mets. He founded SAC Capital in 1992. Since then, he has had a successful track record, losing money only once through 2009.

Earlier this year, Bloomberg reported that Point72 Asset Management, Cohen’s firm, has raised so much cash that it’s starting to decline external money. Since 2020, Point72 has raised about $12.8 billion. In 2023, the fund’s main portfolio returned about 11%, and 12% the previous year.

Nvidia Corp (NVDA): Steve Cohen's AI Stock Pick?
Nvidia Corp (NVDA): Steve Cohen’s AI Stock Pick?

Billionaire Cohen’s Speed and Agility Pays Off

Cohen’s investment style is different from long-term value investors like Warren Buffett. He moves quickly and adapts fast. This has been his approach for decades. During his time at the Wharton School of the University of Pennsylvania, he would often skip classes to watch stock movements at a local brokerage. He took pride in predicting stock movements based on their direction.

Best AI Stock Pick of Billionaire Steve Cohen

Cohen is worth over $19 billion. He adapts to the quickly changing global financial landscape. Investors now demand steady returns. Earlier this year, it was reported that Cohen is expanding macro teams at Point72. The global economy is resetting to a new era of high interest rates. The fund plans to establish as many as 51 macro trading teams.

Is Nvidia Corp (NASDAQ: NVDA) The Best AI Stock to Buy?

Nvidia Corp (NASDAQ: NVDA) has once again exceeded Wall Street estimates. In the first quarter, Nvidia’s EPS was $6.12, higher than the estimated $5.59. Revenue totaled $26.04 billion, surpassing the estimated $24.65 billion. For the second quarter, Nvidia expects revenue of $28 billion, while analysts expected $26.61 billion. Nvidia also announced a 10-to-1 stock split.

Steve Cohen decreased his stake in Nvidia by 55% in the first quarter of 2024. He ended the quarter with a $228 million stake in Nvidia.

Nvidia Corp (NVDA): Steve Cohen's AI Stock Pick?
Nvidia Corp (NVDA): Steve Cohen’s AI Stock Pick?

Why Nvidia is a Top Performer

Nvidia is a market leader in designing and selling Graphics Processing Units (GPUs). The company captures 92% market share of data center GPUs. Over the last year, Nvidia grew revenue by 126%, earnings by 392%, and free cash flow by 610%. Despite its rapid market cap growth, Nvidia’s valuation has come down over the last period.

Nvidia’s GPUs are protected by their CUDA software, creating a strong moat. Even as competition increases, Nvidia is well-positioned with leading-edge technology, innovation, and strong cash generation. The company is set for increased adoption of AI.

Conclusion

Nvidia Corp (NASDAQ: NVDA) was a top performer, gaining 82.5% in the quarter. Over the last year, it gained 242%. The growth is supported by impressive increases in revenue, EPS, and free cash flow. Nvidia’s position in the GPU space is strong, supported by proprietary software. Even with increasing competition, Nvidia is expected to maintain top market share.

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