NVIDIA Corp.'s (NVDA) Relative Underweight in Portfolio Negatively Affected Macquarie Core Equity Fund's Performance

Macquarie Asset Management, an investment management company, released its “Macquarie Core Equity Fund” investor letter for the second quarter of 2025. A copy of the letter can be downloaded here. The US large-cap equity market surged in Q2 2025, with the S&P 500® Index rising 10.94%. The equity market’s strength was due to reduced concerns over the possibility of President Trump quickly imposing harsh tariffs. Later, the administration put a pause on the tariff implementation. In this environment, the Macquarie Core Equity Fund’s Institutional Class returned 11.94% surpassing the benchmark, the S&P 500 Index. Eighty percent of the relative performance was driven by sector selection, and individual security selection accounted for the remainder. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, the Macquarie Core Equity Fund highlighted stocks such as NVIDIA Corporation (NASDAQ:NVDA). NVIDIA Corporation (NASDAQ:NVDA) offers graphics, compute, and networking solutions. The one-month return of NVIDIA Corporation (NASDAQ:NVDA) was -0.98%, and its shares gained 51.93% of their value over the last 52 weeks. On September 18, 2025, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $176.24 per share, with a market capitalization of $4.291 trillion.

Macquarie Core Equity Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2025 investor letter:

"NVIDIA Corporation (NASDAQ:NVDA) performed strongly in the quarter on renewed AI optimism and reduced concern that an individual customer or two will moderate capital expenditures. Though the Fund’s weight was among our largest positions at over 4.5% during the quarter, the relative underweight (the benchmark weight averaged 6.3%) negatively affected relative returns."

NVIDIA Corporation (NASDAQ:NVDA) is in 5th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 235 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the second quarter, up from 212 in the previous quarter. In the second quarter of fiscal 2026, NVIDIA Corporation (NASDAQ:NVDA) reported $46.7 billion in revenues, exceeding the expectations.  While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered NVIDIA Corporation (NASDAQ:NVDA) and shared a list of stocks Jim Cramer discussed recently. In addition, please check out our hedge fund investor letters Q2 2025 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.