Polen Capital Global Growth has an Uncertain Outlook on NVIDIA Corporation (NVDA)

Polen Capital, an investment management company, released its “Polen Global Growth Strategy” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. Global equity markets experienced a surge in volatility in 2025 due to US tariffs, with the "Magnificent 7" falling 15% and semiconductors dropping 19%. U.S. stocks lagged, with international equities surpassing them by nearly 10% due to a weakening dollar and a significant tariff shock after the quarter's close. The Strategy returned -5.18% gross (-5.45 % net) in the quarter compared to the MSCI ACW Index’s -1.32% return. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Polen Global Growth Strategy highlighted stocks such as NVIDIA Corporation (NASDAQ: NVDA). NVIDIA Corporation (NASDAQ:NVDA) offers graphics and compute, and networking solutions. The one-month return of NVIDIA Corporation (NASDAQ:NVDA) was 18.17%, and its shares gained 23.21% of their value over the last 52 weeks. On May 22, 2025, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $132.83 per share with a market capitalization of $3.197 trillion.

Polen Global Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2025 investor letter:

"NVIDIA Corporation (NASDAQ:NVDA) (not owned) is a large index constituent that saw share prices fall nearly 20% in the quarter. In recent years, NVIDIA has become the poster child of the generative AI infrastructure build out, given the critical role of its Graphics Processing Units (GPUs) in powering the technology. In late January, the stock sold off more than 17% in a single day on the back of the DeepSeek news out of China. The news prompted investors to question the need for growing GPU-related capex if large language models (LLMs) could achieve similar results more cost-effectively. While the stock partially recovered in the following weeks, concerns again intensified on news that NVIDIA’s leading-edge Blackwell GPUs— banned from export to China—were making their way to China via a Singapore-based shadow network. This revelation—combined with mounting U.S.-China geopolitical tensions—introduced new concerns that the U.S. could take an even more restrictive stance on exports to China. Consistent with our commentary over the past couple of years, we maintain a cautious stance around NVIDIA, given our inability to predict its long-term growth with a high degree of confidence."

NVIDIA Corporation (NASDAQ:NVDA) is in 5th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 223 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the fourth quarter which was 193 in the previous quarter. NVIDIA Corporation (NASDAQ:NVDA) reported another record quarter in fiscal Q4 2025 with $39.3 billion in revenues, representing a 78% year-over-year increase and 12% sequential growth. While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered NVIDIA Corporation (NASDAQ:NVDA) and shared the list of AI stocks surging on news and analyst ratings. In addition, please check out our hedge fund investor letters Q1 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.