Nvidia had an extraordinary surge last week, gaining 24% and rewarding a handful of active managers of well-known Large Growth funds who invested in the stock despite its high price, reports an article in CityWire. Steven Wymer, who manages the Fidelity Growth Company fund, had a 10.9% stake in the stock as of the end of March, and Nvidia’s surge fueled a 3% rise in the fund on the day.
The Fidelity Growth Company fund has returned 16.54% annually for the past decade, compared to 11.69% for the S&P 500 and 14.26% for the Russell 1000 Growth indexes. Wymer has managed the fund for 25 years, during which time he’s garnered an 11.85% annualized return for the fund, with the S&P 500 and Russell 1000 Growth returning 8.75% and 8.99%, respectively, for the same time period. But the Fidelity Growth Fund is currently closed to new investors, shutting out anyone wanting to get in on the action. Other diversified, actively-managed funds that hold substantial quantities of Nvidia stock include the Fidelity Blue Chip Growth, with 7.61% of its $40.4 billion holdings in Nvidia. The fund rose 2.57% in the wake of Nvidia’s surge, according to the article. In addition to the two Fidelity funds, the Loomis Sayles Growth fund holds 7.24% of Nvidia stock, and rose 2% as a result of the surge.
The surge in Nvidia increased its market capitalization by $184 billion, and put a value of over $900 billion on its stock, after the stock had already doubled in 2023. Through May 24, Nvidia stock had gained 30% on an annualized basis for the trailing 15-year period, giving anyone who had invested in the stock for that length of time an astounding 51-fold increase. The shares are up 168% so far this year, driven by the frenzy surrounding AI; indeed, it was a statement made by CEO Jensen Huang indicating that Nvidia’s graphics processing units would be a vital part of AI-enabled products that prompted the stock’s surge, the article reports.
But Huang warned in an interview with the Financial Times that chip sales to China were slowing down due to the Biden administration’s tightened regulations, and that could not only impact Nvidia’s business negatively but also propel China to start developing graphics chips just like Nvidia’s. Still, that warning seemed to not matter much to investors. As Nvidia is now trading at 35 times sales, it’s now up to the managers of the Large Growth funds who hold significant stakes in the company whether they want to sell it. Regardless of whether they hang onto it or not, “credit them for having held it ahead of its surge,” the article concludes.