Investors have been riding high on the wave of Nvidia Corp’s (NASDAQ:NVDA) soaring stock, but the outsized positions could spell risk if the chipmaker’s shares take a downturn.
What Happened: Led by Jensen Huang, Nvidia shares have seen a staggering 785% increase since the start of 2023, with a 160% rise this year alone. The surge is attributed to the high demand for Nvidia’s chips, considered the gold standard in the AI field.
Asset managers have increased their holdings of Nvidia as its stock price has surged. Data from Morningstar reveals that 355 actively managed funds held Nvidia positions that accounted for 5% or more of their assets at the end of the first quarter of 2024, a significant increase from 108 funds in the same period last year.
However, the concentration in Nvidia shares could pose a risk to investors if the stock hits a rough patch, Reuters reported on Monday. Despite the average price target for the stock standing at $133.45, some market participants point to increasing competition, an expected balance between supply and demand as Nvidia ...