Nvidia (NVDA 0.78%) and Chipotle Mexican Grill (CMG 0.90%) are both fantastic companies. Nvidia is crucial for the AI sector, while Chipotle has established a strong brand in the restaurant industry. Both stocks were recently split to adjust their high prices.

However, some wealthy hedge fund managers sold Nvidia shares in Q2 while buying Chipotle shares:

  • Cliff Asness (AQR Capital) sold 1.3 million Nvidia shares and bought 673,292 Chipotle shares.
  • Israel Englander (Millennium) sold 672,242 Nvidia shares and bought 3.5 million Chipotle shares.
  • Steven Cohen (Point72) sold 409,042 Nvidia shares and purchased 1.4 million Chipotle shares.
  • Steven Schonfeld sold 370,349 Nvidia shares and acquired 131,715 Chipotle shares.

Despite these trades, Nvidia remains a solid investment. All four managers still hold Nvidia shares, with it being the largest stake in AQR’s portfolio.

1. Nvidia

Nvidia is a leader in the AI sector, dominating the market with an 80% share in AI accelerators due to its powerful GPUs and excellent software tools. Analysts predict a strong future, projecting its market share to remain high.

Recently, Nvidia’s revenue surged 122% to $30 billion, driven by AI hardware demands. Its earnings grew significantly as well.

With the upcoming launch of its new GPU, Blackwell, which is already in high demand, investors can expect continued momentum.

Although hedge fund managers sold Nvidia at a 66.4 earnings multiple in Q2, the current multiple is lower at 64.7. Long-term investors may find it worth considering, but it’s not a bargain.

2. Chipotle Mexican Grill

Chipotle runs over 3,500 restaurants focused on high-quality food. The company has a strong focus on customer experience and efficient service, improving throughput to meet demand.

Chipotle’s Q2 saw an 18% revenue increase, driven by strong customer traffic and sales.

Interestingly, the hedge fund managers mentioned earlier were buying Chipotle shares in Q2, which is seen as a more attractive buy now than before.

However, with a PEG ratio of 2.6, Chipotle’s stock is still expensive. It may be wise for new investors to wait for a price dip before entering.