Paul Wick of Seligman Investments reduced his stake in Nvidia and expressed doubts about the company’s future revenue growth. During a UBS Group event in Singapore, Wick stated that his enthusiasm for Nvidia has recently waned, although he did not elaborate on the extent of this impact.
Reducing his exposure. He compared Nvidia’s current situation to that of Cisco Systems during the dot-com bubble, highlighting potential risks.
Wick pointed out that Nvidia heavily relies on its top ten customers, who contribute 60-70% of its revenue. This makes Nvidia more vulnerable compared to more diversified companies like Microsoft or Google’s parent company, Alphabet.
Despite Nvidia’s stock price doubling in the past year due to optimism about artificial intelligence, Wick and other investors are skeptical about the sustainability of this upward trend and highlight the company’s overvaluation.
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Wick also mentioned that companies investing in Nvidia’s AI systems have lower returns, while major customers like Alphabet, Microsoft, and Meta Platforms are developing their own processors, which could reduce their reliance on Nvidia in the future.
Despite these concerns, Nvidia remains a leading position in Wick’s fund, outperforming 97% of mutual funds in the past three years.
