Smallcap stock hits 10% lower circuit after inclusion in Additional Surveillance Measures (ASM)
Stocktwits - Nvidia stock may have staged a strong rebound from the tariff-hit downturn, but a bullish investor has thrown in the towel, citing lingering risks.
A Bloomberg report said hedge fund manager Jonah Cheng, who picked Nvidia stock as one of the initial bets of his tech-focused fund, Captain Global Fund, has cashed out of it.
Since picking up the stock in 2016, Cheng has been adding to his position.
Cheng’s liquidation followed fears about delays in GB200 racks, inventory risks, a lack of upward revisions to earnings forecasts, competition from custom-designed chips, and uncertainty around spending by cloud computing companies.
In late May, while releasing its first-quarter results, Nvidia flagged $8 billion in second-quarter charges related to the U.S. government’s China chip restrictions. The revenue guidance of $45 billion, plus or minus 2%, therefore, was roughly in line with the consensus estimate that was expected at that time.
Cheng reportedly said, “I really like Nvidia, which is the stock that helped me make the most money in my life.”
“But when I need to sell, I need to sell. You can’t fall in love with a stock.”
At the same time, he clarified that he hasn’t become a Nvidia bear either, adding that he would buy back Nvidia shares if the Jensen Huang-led company revises its earnings estimates higher.
An investment in Nvidia at the start of 2016, around the time Cheng began investing in the stock, would have fetched an investor a whopping return of about 18,000%.
Cheng is a former UBS analyst. His Captain Global Fund had $100 million in assets under management (AUM). His Taipei City, Taiwan-based fund generated returns of 42% for its investors last year.
In late 2024, Cheng’s fund sold its Taiwan Semiconductor Manufacturing (TSM) holding as the Taiwanese chip foundry found itself in the crosshairs of geopolitical tensions, and visibility on cloud service provider spending dimmed.
Nvidia stock ended Monday’s session up 1.92% at $144.69, although trading off its all-time high of $153.13 hit in early January.
The stock came under selling pressure early this year when Chinese artificial intelligence (AI) startup DeepSeek launched its cheaper large-language models (LLMs). Later, Trump tariffs and China chip curbs weighed down on the stock, taking it as low as $86.62 in early April.
Sell-side analysts are upbeat about the stock’s trajectory. The Koyfin-compiled consensus analyst price target is $172.11, up about 19% from Monday’s closing price.
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