Overinvested in Nvidia? Here are some alternative growth stocks
Investor darling Nvidia continued its artificial intelligence-fueled boom, with its earnings beating expectations last week. The company’s earnings report Wednesday sent its shares over $1,000 for the first time. The stock continued to perform well during Thursday’s session — finishing up more than 9% to a record high. But some analysts are worried about a potential slowdown in growth from the previous quarter, or an “air pocket” in sales toward year-end. “The biggest question that remains is how long this runway is,” said Lucas Keh, analyst at research firm Third Bridge. “When the majority of AI workloads in the cloud move over from training to inference, Nvidia’s dominant market share position will be tested. Most use cases in inference do not require the depth/amount of compute provided by Nvidia’s top GPUs,” he said. Nancy Tengler of Laffer Tengler Investments said she had expected to see a higher move, given the “blowout earnings.” “But I think a lot of that has been priced in and now you’ll see it trickle out … into other players in this space,” the chief investment officer told CNBC’s ” Squawk Box Asia ” on Thursday. Wall Street is still mostly bullish on Nvidia, with several analysts raising price targets on the stock. But investors who are worried about being overexposed to Nvidia or who want to make their portfolios more balanced could consider replacing their Nvidia allocation or complementing it with other growth stocks with a low correlation to the chipmaker. Using FactSet, CNBC Pro screened four exchange-traded funds for stocks that have negative or low correlation to Nvidia in the past month. The ETFs are Vanguard S & P 500 Growth ETF, Schwab U.S. Large-Cap Growth ETF, Vanguard Russell 1000 Growth ETF and Fidelity Enhanced Large Cap Growth ETF. These stocks showed up.
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