Why This Investor Just Bought Nvidia (NVDA)

Why This Investor Just Bought Nvidia (NVDA)

Mon, August 10, 2026 at 4:09 PM GMT+3 3 min read

• NVDA -0.22%

Brown Advisory, an investment management company, released its "Brown Advisory Global Leaders Strategy" for the second quarter of 2026 investor letter. A copy of the letter can be downloaded here. Brown Advisory's Global Leaders Strategy delivered a net return of 4.6% in the second quarter of 2026, underperforming its benchmark, the MSCI ACWI Net Index, which returned 14.9%. The relative weakness was driven mainly by underexposure to semiconductors and technology hardware, while software, cloud services, and financial holdings also weighed on performance. The strategy benefited from holdings in areas tied to AI infrastructure, with semiconductor exposure and AI-related investments gaining from strong demand. Looking ahead, Brown Advisory sees an attractive environment for active stock-picking, with its ready-to-buy list at its highest level since the COVID-19 period and an estimated 12%-13% average five-year base-case IRR, while maintaining a focus on quality, valuation discipline, and long-term cash-flow generation. In addition, please check the Fund's top five holdings to know its best picks in 2026.

In its second-quarter 2026 investor letter, Brown Advisory Global Leaders Strategy Fund highlighted stocks like NVIDIA Corporation (NASDAQ:NVDA). NVIDIA Corporation (NASDAQ:NVDA) is a semiconductor company that develops GPUs and computing platforms powering artificial intelligence, data centers, and high-performance computing. The one-month return of NVIDIA Corporation (NASDAQ:NVDA) was 10.04% while its shares traded between $164.07 and $236.54 over the last 52 weeks. On August 7, 2026, NVIDIA Corporation (NASDAQ:NVDA) stock closed at approximately $218.99 per share, with a market capitalization of about $5.42 trillion.

Brown Advisory Global Leaders Strategy Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2026 investor letter:

We initiated a position in Nvidia (NASDAQ:NVDA) in June. Over the last four years, Nvidia has positioned itself as the leader across all parts of the technical component layer within the AI technology stack, including AI silicon, networking, cooling and total rack systems. Meanwhile, it has invested heavily in seeding an AI ecosystem based on Nvidia technology within the application, model and cloud compute layers, helping to drive usage of its infrastructure products. Nvidia has reshaped its business from consumer and professional GPU cyclicality toward data-centre infrastructure platform economics. This has resulted in market expansion far beyond our original base case estimates. As part of our ongoing analysis of semiconductor end market demand across the entire value chain, we observed that every part of the technical infrastructure around Nvidia including optical networking demand, lasers, CPUs, TSMC's capex plans, wafer fab equipment demand, and the contract manufacturers assembling Nvidia's racks all implied that demand for Nvidia equipment remains very robust and likely underestimated. We have updated our estimates to derive new base case estimates for Nvidia to reach a double-digit five-year IRR.

NVIDIA Corporation (NASDAQ:NVDA) is in 4th position on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 275 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the first quarter, which was 264 in the previous quarter. While we acknowledge the risk and potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

In another article, we covered NVIDIA Corporation (NASDAQ:NVDA) and shared our analysis of the company's AI-driven network strategy. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.