Nvidia 'Valuation isn't exactly attractive,' ESG fund managers say despite big bets last year: '… portends a bubble, potentially' – NVIDIA (NASDAQ:NVDA)

The growing stock of NVIDIA Corp. NVDA has raised concerns about a possible bubble among ESG fund managers. The managers, who made significant profits from the stock, are now wary of its sustainability.

What happened: The proportion of ESG funds holding Nvidia shares fell to 15% at the end of December from a high of 20% in the second quarter of 2023. reported Bloomberg. This decrease in exposure has raised concerns among ESG fund managers, who had previously outperformed the market by investing heavily in Nvidia.

One of those administrators is Christopher Barrettwhich made Nvidia the largest holding in the Swedbank Robur Technology fund, leading it to become the best-performing ESG fund in 2023. Despite his long-term optimism, Barrett acknowledges that Nvidia's valuation is a concern.

“I'm a long-term bull, but I recognize the valuation isn't exactly attractive,” Barrett said.

“There's an understanding that this has become a retail stock… And that portends a bubble, potentially.”

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Despite the drop in ESG funds' exposure, Nvidia's market value increased 17% in the same period. The company's market value soared almost 240% last year and will already be up almost 80% by 2024. None of the 66 analysts who follow Nvidia advise clients to sell, and 60 recommend buying the stock, according to the report.

Because it is important: Concerns raised by ESG fund managers align with recent warnings about a potential bubble in tech stocks, including Nvidia. Renowned finance professor Jeremy Siegel He recently warned that the current enthusiasm for tech stocks could be a sign of an impending bubble.

However, some experts argue that the current technological rebound is not a bubble. Ryan DetrickChief market strategist at Carson Group, noted that Nvidia's earnings have increased more than 250% since the beginning of 2022, while the company's multiple has only expanded by just over 100%.

Despite Bubble Concerns, Prominent Hedge Fund Manager and niles He recently revealed Nvidia as one of his top stock picks for 2024. He believes the earnings potential of Nvidia and other big tech companies will boost its stock performance in 2024.

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