Here’s Why SaltLight Decided to Trim NVIDIA Corporation (NVDA)

Insider Monkey

SaltLight Capital, an investment management company, released its “SaltLight SNN Worldwide Flexible Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. The second quarter letter is discussing AI. The firm’s investment strategy for AI’s exciting future is guided by prudent caution. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Saltlight Capital highlighted stocks like NVIDIA Corporation (NASDAQ:NVDA) in the second quarter 2023 investor letter. Headquartered in Santa Clara, California, NVIDIA Corporation (NASDAQ:NVDA) provides computer graphics processors, chipsets, and related multimedia software. On August 16, 2023, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $434.86 per share. One-month return of NVIDIA Corporation (NASDAQ:NVDA) was -4.47%, and its shares gained 131.64% of their value over the last 52 weeks. NVIDIA Corporation (NASDAQ:NVDA) has a market capitalization of $1.074 trillion.

Saltlight Capital made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2023 investor letter:

NVIDIA Corporation (NASDAQ:NVDA) has become the de-facto AI name in the market (rightly so) and has delivered a remarkable performance for us. We have been gradually trimming our investment to, what we call, an ‘optionality’ size position as the stock price has dramatically gone up. Conditions are chalk and cheese to when we first purchased our investment.

Recent news makes us think twice: PyTorch 2.0, the machine learning framework recently announced support for AMD GPUs which is a negative for NVIDIA.

For many readers, this may be getting into the weeds but in our May 2021 letter, we discussed one aspect of NVIDIA’s competitive edge – its proprietary CUDA software. Operating as the interface between their GPUs and machine learning (ML) libraries, CUDA has become the standard layer in the AI stack to enable parallelised processing, a critical function for complex neural network models. Competing, cheaper, GPUs with inferior working libraries struggled to gain meaningful traction because the early versions of machine learning libraries (PyTorch and TensorFlow) did not directly interface with them. This created friction for developers and effectively blocked cheaper competitor GPUs from handling machine learning workloads….” (Click here to read the full text)

Photo by Javier Esteban on Unsplash

NVIDIA Corporation (NASDAQ:NVDA) is in 17th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 175 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of second quarter which was 132 in the previous quarter.

We discussed NVIDIA Corporation (NASDAQ:NVDA) in another article and shared Jim Chanos’ short positions in 2023. In addition, please check out our hedge fund investor letters Q2 2023 page for more investor letters from hedge funds and other leading investors.


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Disclosure: None. This article is originally published at Insider Monkey.