Nvidia is not favored by more than half of the members of this ultra-rich club

More than half of Tiger 21 members do not invest in Nvidia, according to a recent asset allocation report released by this network of ultra-high-net-worth investors and entrepreneurs.

The network’s second-quarter asset allocation report showed that 57 percent of its members are not invested in darling Nvidia, with the majority of members who chose to stay away from the stock saying they had no plans to start a position in the company. .

“While Nvidia is the undisputed leader in AI right now, no company’s growth lasts forever, and competitors often catch up, leading to a recalibration of the market,” said Michael Sonnenfeldt, president of the ultra-rich club. The personal assets of its members are collectively worth more than $165 billion, according to data provided by Sonnenfeldt.

Members of the group, which was founded in 1999 by Sonnenfeldt, share advice with each other on wealth preservation, investments and philanthropic endeavors.

Tiger 21 has 123 groups in 53 markets. The network has over 1,450 members.

Of the 43 percent of members invested in Nvidia, most do not plan to add more shares amid concerns that it has already reached too much.

Those fears appear to have been well-founded, as Nvidia stock fell 9.5 percent overnight, wiping about $300 billion off its market cap, amid a broad selloff in U.S. markets.

Some 43% of club members polled also expect Nvidia’s success not to last into the next decade.

Some members have chosen to avoid the technology altogether and therefore have no Nvidia in their portfolio, preferring real estate or other sectors, Sonnenfeldt said.

“For others, it’s due to the nature of technology investment today. Tiger 21 members have watched Tesla rise only to have nearly every major automaker offer an electric vehicle, so while Nvidia is currently the leader, some Tiger 21 members believe it’s only a matter of time before the competition to catch up,” he said.

Sonnenfeldt also said the club’s members are more focused on preserving wealth than chasing big profits.

“They might avoid Nvidia because of its volatility and the risks associated with investing in technology, despite its impressive growth,” he said.

Nvidia, which has been called “the world’s most important stock,” led the artificial intelligence boom to a $3 trillion market cap earlier this year, growing nearly ninefold by the end of 2022.

However, the company’s meteoric rise stalled a bit this summer. On August 7, the stock fell about 27% to trade below its June record high.

Nvidia led semiconductor stocks lower on Tuesday amid a selloff on Wall Street, with shares continuing to fall 2 percent.

Sonnenfeldt is optimistic about the broader AI industry, however. “The potential of artificial intelligence appears to be one of – if not the most – investment themes in all of financial history,” said Sonnenfeldt.

According to Tiger 21’s recent member allocation report, most of its member allocation is in private equity at 28%. Real estate takes up 26% of members’ portfolios, despite high interest rates, while public stocks make up 22% of their asset allocation.