Wealthy figurehead Ken Griffin isaccumulating shares in Nvidia and Tesla. Is it advisable for you to follow suit?
Any list of the top hedge fund managers of all time would likely include Ken Griffin. He established Citadel Advisors back in 1990, which has since grown to become one of the largest and most successful hedge funds in the United States. As of now, Griffin's net worth is estimated at around $46.7 billion, placing him at the 31st spot on the global wealthiest individuals list.
Naturally, Griffin's stock choices are closely watched by many investors. In the third quarter of a certain year, Citadel disclosed in their 13F filing with the US Securities and Exchange Commission that they had acquired an additional 4.7 million shares of Nvidia, boosting their stake in the tech company by a significant 194%. This made Nvidia the third-largest holding in Citadel's portfolio at the end of Q3.
Remarkably, Griffin's purchase of Nvidia shares in Q3 went against the trend seen in the previous quarters. Citadel had sold off 24.6 million shares of Nvidia in Q1 and another 9.28 million shares in Q2.
Additionally, Citadel also bought an impressive amount of Tesla shares in Q3. Griffin's acquisition of around 1.17 million shares increased Citadel's position in the electric vehicle leader by nearly 5 times. Griffin had initially invested in Tesla in the second quarter of 2013, sold his shares in Q4 of the same year, and repurchased them in the following quarter. He then continued to buy and sell Tesla shares until the present day, holding onto them consistently.
Griffin hasn't publicly commented on his reasons for purchasing Nvidia and Tesla shares in Q3. However, we can make some educated guesses.
Nvidia continues to be the leading player in the artificial intelligence (AI) chip market. The demand for AI chips is on the rise, driven mainly by the surge in creating generative AI applications.
It's possible that Griffin saw an opportunity to buy at a lower price during Q3 when Nvidia's stock took a dip due to rumors of potential delays in their Blackwell GPUs.
Tesla's stock also saw a drop in part of Q3. In early August, the EV stocks declined by around 27% below their previous peak. However, the exact timing of Griffin's Tesla share purchase for Citadel's portfolio remains unclear.
Should other investors follow Griffin's lead and buy Nvidia and Tesla shares? While it's tempting to do so, it's essential to remember that not everyone has the same investment goals or risk tolerance as a billionaire hedge fund manager. Moreover, neither Nvidia nor Tesla are currently trading at the discounted prices they saw in Q3.
However, both Nvidia and Tesla have excellent long-term growth potential. Nvidia's Blackwell GPUs, when released, could potentially set a new standard for handling AI workloads. The company also plans to roll out even more powerful chips in the coming year.
Tesla could stand to gain significantly if the U.S. government establishes a relaxed regulatory framework for self-driving cars. Tesla recently introduced its robotaxi vehicle and plans to expand its autonomous ride-hailing services in the following year.
Between the two, Nvidia may be a better investment choice at the moment, but both companies have the potential to deliver exceptional returns over the next decade and beyond.
Given Griffin's successful track record in finance and investing, many investors closely monitor his stock choices. In line with this, Citadel disclosed a significant increase in their Nvidia shares in Q3, potentially seeing value in the tech company's rising AI chip market. Meanwhile, the finance sector is also keeping an eye on Griffin's continuing investment in Tesla, a leader in the electric vehicle industry, despite its Q3 stock drop.
As Griffin continues to show interest in companies like Nvidia and Tesla, these investments could be worth watching for potential opportunities, especially considering both companies' promising growth prospects in their respective industries.
