Billionaires Are Selling Nvidia Stock and Buying 1 Supercharged Index Fund for the Artificial Intelligence Boom
Four wealthy hedge fund managers sold shares of Nvidia during the fourth quarter and redeployed the proceeds into the Invesco QQQ Trust.
Nvidia was the best-performing stock in the S&P 500 last year. Its share price surged 239% as investors bet on the company's leadership in artificial intelligence (AI).
But in recent months, Nvidia's stock has come under pressure. The company has been hurt by the global chip shortage, and its earnings have missed expectations.
As a result, several hedge fund managers have been selling shares of Nvidia. John Overdeck and David Siegel of Two Sigma Investments sold 306,663 shares of Nvidia in the fourth quarter. Billionaire Israel Englander sold Nvidia stock during the first quarter while purchasing shares of the Invesco QQQ Trust.
The Invesco QQQ Trust is an index fund that tracks the Nasdaq 100 Index. The index is composed of the 100 largest non-financial companies listed on the Nasdaq stock exchange.
The Invesco QQQ Trust is heavily weighted towards technology stocks, which have been outperforming the broader market in recent years. The fund's top holdings include Apple, Microsoft, Amazon, Tesla, and Nvidia.
The decision by hedge fund managers to sell Nvidia stock and buy the Invesco QQQ Trust suggests that they are betting on the continued outperformance of technology stocks.
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