Nvidia (NVDA 4.14%) and Chipotle Mexican Grill (CMG 0.52%) are two top companies. Nvidia is key in the AI market, while Chipotle has a strong brand in restaurants. Both recently did stock splits due to high share prices.
However, some hedge fund billionaires sold Nvidia shares in Q2 while buying Chipotle stocks:
- Cliff Asness of AQR sold 1.3M Nvidia shares and bought 673K Chipotle shares.
- Israel Englander of Millennium sold 672K Nvidia shares and added 3.5M Chipotle shares.
- Steven Cohen of Point72 sold 409K Nvidia shares and purchased 1.4M Chipotle shares.
- Steven Schonfeld of Schonfeld sold 370K Nvidia shares and bought 132K Chipotle shares.
These trades don’t mean Nvidia is a bad investment; the managers still hold shares of the company, and Nvidia is a major part of AQR’s investment portfolio.
1. Nvidia
Nvidia is vital to the AI industry, holding 80% market share in GPUs used for data processing. They reported a 122% increase in revenue to $30 billion due to strong AI demand, and earnings soared 152% to $0.68 per share.
Analyst Vivek Arya from Bank of America raised Nvidia’s price target to $190/share, expecting a continued strong market position. Their new GPU model, Blackwell, launches soon, with demand already at a high.
Today, Nvidia’s stock is trading at 64.7 times earnings, making it more appealing than before. Investors should consider buying a small amount, as the valuation is reasonable, but not cheap.
2. Chipotle Mexican Grill
Chipotle runs over 3,500 fast-casual restaurants focusing on quality ingredients. By managing operations effectively, the company reported an 18% revenue increase to $3 billion and a 36% rise in net income to $0.34 per diluted share.
Hedge fund managers were buying Chipotle shares in Q2, which now trade at 58.2 times earnings. While earnings are projected to grow by 22% annually, the stock is still considered expensive. Investors should wait for a potential price drop before purchasing.
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