NVIDIA Corporation (NVDA) Surged Amid Multiple Growth Drivers

Fred Alger Management, an investment management company, released its “Alger Spectra Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the equities rebounded significantly following a challenging first quarter. In this environment, the fund’s Class A shares outperformed the Russell 3000 Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Alger Spectra 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 1.01%, and its shares gained 51.91% of their value over the last 52 weeks. On September 22, 2025, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $183.61 per share, with a market capitalization of $4.47 trillion.

Alger Spectra Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2025 investor letter:

"NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality, and high performance computing. The company is leading in most secular growth categories in computing, and especially AI and super-computing parallel processing techniques for solving complex computational problems. In our view, Nvidia’s computational power is a critical enabler of AI and therefore essential to AI adoption. Shares rose during the quarter after the company reported better-than-expected first-quarter operating results, where total revenues grew 69% year-over-year (y/y). Strong revenue growth was fueled by a 73% y/y increase in data center sales; that segment now contributes 89% of Nvidia’s revenue as AI workloads shift to compute-intensive inference and large “AI factory” build outs. Further, Blackwell (GB-200) chips currently generate 70% of data center revenue, nearly completing the transition from Hopper, its previous GPU architecture. In our view, Nvidia is extending its lead with Blackwell Ultra (GB-300), now in trials, which retains the same architecture but offers 50% more high-bandwidth memory and up to 50% faster inference performance than the GB-200, according to management."

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 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 the list of stocks buzzing after important analyst calls. 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.