Bridgewater's 65% Reduction in Nvidia. Should We Hold Or Sell?
๐๐๐Bridgewater Associates is one of the world's largest and most influential hedge funds founded in 1975 by Ray Dalio. Bridgwater has rotated out of tech heavy positions like$NVIDIA(NVDA)$
Should we hold or sell Nvidia?
Nvidia has seen a 5% pullback in the weeks leading up to earnings. This is typical of high volatility tech stocks.
Options markets imply a 6.2% move, as traders expect a swing of USD 11 to USD 12 per share post earnings.
This set up often reflects uncertainty, not pessism especially when paired with implied high volatility.
Hold vs Sell : Key Considerations
Reasons to hold :
Strong long term narrative: Nvidia leads the AI infrastructure race with Blackwell GPUs and hyperscaler demand driving growth.
Earnings momentum: Nvidia has beaten estimates in 19 out of 20 quarters.
Nvidia's CUDA Moat: CUDA stands for Compute Unified Device Architecture. It is Nvidia's proprietary parallel computing platform and programming model. It allows developers to harness the power of Nvidia's GPUs for general purpose computing especially in AI, machine learning, scientific research and high performance computing.
Why is CUDA a moat?
CUDA has a massive ecosystem of developers, libraries and tools built over nearly 2 decades.
Switching to alternatives like $Advanced Micro Devices(AMD)$ ROCm or Intel's oneAPI requires retraining, rewriting code and risking performance loss.
This creates high switching costs, making CUDA a sticky platform.
Reasons to Trim or Sell Nvidia :
Short term uncertainty : If you are overweight on Nvidia or nervous about earnings volatility, trimming or hedging with covered calls could reduce risk.
Macro headwinds : If interest rates rise or tech sentiment weakens, Nvidia could face pressure even on strong earnings.
My Personal Reflections :
I believe that Bridgewater's 65% reduction in Nvidia signals a tactical repositioning, not necessarily a Bearish thesis. I notice that they did not completely sell off their Nvidia's holdings.
I am currently holding Nvidia with a long term horizon as I believe in Nvidia's AI exponential growth ahead. Holding Nvidia isn't just about riding the AI wave. It is about owning the infrastructure of innovation for the future.
AI isn't just a trend. It is a tectonic shift. It is reshaping industries, redefining productivity and changing the way we live. Nvidia to me represents our dreams and aspirations for the future where Robotics, Flying Cars, Going to Space may be mundane affairs.
@Tiger_SG @Tiger_comments @TigerStars @TigerClub @CaptainTiger
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