Doug Clinton, CEO of Intelligent Alpha, highlighted Nvidia as their top AI investment despite challenges in the tech sector, citing strong demand for Nvidia chips from hyperscalers and the company’s solid earnings. He advised investors to hold onto mega-cap tech stocks like Apple, Alphabet, and Meta, emphasizing the long-term resilience and demand for AI products.
In a recent discussion, Doug Clinton, founder and CEO of Intelligent Alpha, shared insights on the current state of the tech sector, which is facing challenges due to tariff uncertainties and ongoing antitrust lawsuits. Despite the negative sentiment surrounding big tech companies, Clinton emphasized that Nvidia remains their top pick in the AI space. He acknowledged that Nvidia’s stock has struggled over the past year, but he believes the company’s solid earnings and the de-risking of the China issue position it well for future growth.
Clinton pointed out that, regardless of economic conditions, hyperscalers will continue to invest in Nvidia chips, indicating a strong demand for their products. He addressed concerns about the pricing of chips, noting that while prices typically decrease over time in the tech industry, the demand for AI products is increasing. Recent launches from major AI players like OpenAI, X.ai, and Google have highlighted capacity constraints, suggesting that the demand for chips will persist even if prices drop.
When discussing other tech stocks, Clinton revealed that Intelligent Alpha does not hold Apple in their portfolio, making Nvidia the only mega-cap tech stock they own. Earlier in the year, their AI models shifted away from big tech, except for Nvidia, and they have adopted a barbell investment strategy that includes AI stocks like Micron and TSM, alongside a significant position in gold and gold miners.
Clinton advised investors holding stocks like Apple, Alphabet, and Meta to maintain their positions rather than shorting them. He reflected on the previous two years, where owning mega-cap tech stocks was seen as a strategic move in anticipation of a recession. He believes these stocks offer both offensive and defensive advantages due to their strong balance sheets and essential products.
In conclusion, while the tech sector faces various pressures, Clinton’s confidence in Nvidia as a leading AI investment remains strong. He encourages investors to consider the long-term demand for AI products and the resilience of mega-cap tech stocks, suggesting that patience may be key in navigating the current market landscape.