Nvidia, a favorite among investors, experienced a significant rise in its stock value following an earnings report that exceeded expectations. The company’s shares surpassed $1,000 for the first time and continued to perform well, reaching an all-time high. However, some analysts are concerned about a possible slowdown in growth in the coming months, or a “air pocket” in sales towards the end of the year. According to Lucas Keh of Third Bridge, the main question is how long Nvidia’s successful streak will last as the majority of cloud AI workloads transition from training to inference, potentially affecting the company’s market share. Nancy Tengler of Laffer Tengler Investments noted that the spectacular gains in Nvidia’s stock may already be factored in, and it is possible that other players in the market will benefit from this success.
Despite these concerns, Wall Street remains optimistic about Nvidia, with many analysts increasing price targets on the stock. However, for investors looking to diversify their portfolios or reduce exposure to Nvidia, it may be worth considering other growth stocks with a low correlation to the chipmaker. CNBC Pro identified four exchange-traded funds (ETFs) – Vanguard S&P 500 Growth ETF, Schwab US Large-Cap Growth ETF, Vanguard Russell 1000 Growth ETF, and Fidelity Enhanced Large Cap Growth ETF – that have shown a negative or low correlation with Nvidia in the past month.
Overall, Nvidia’s strong performance in the AI sector has attracted investor attention and driven its stock price to record levels. However, concerns about future growth and market share challenges remain, prompting some analysts to suggest diversifying portfolios with other growth stocks. Investors should carefully consider their risk tolerance and investment goals when evaluating their exposure to Nvidia and exploring alternative options in the market.
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https://www.cnbc.com/2024/05/27/overinvested-in-nvidia-here-are-some-alternative-growth-stocks.html
