Nvidia (NVDA +1.95%) shares have advanced 1,080% since January 2023 as demand for artificial intelligence (AI) infrastructure has surged. Nevertheless, the hedge fund billionaires listed below sold Nvidia in the first quarter and bought shares of the iShares Bitcoin Trust (IBIT +2.27%), a BlackRock fund that could soar in the coming years if certain Wall Street experts are correct.
- Ken Griffin of Citadel Advisors sold 1.5 million shares of Nvidia, reducing his position 50%. He also added 2 million shares of the iShares Bitcoin Trust, increasing his stake 195%.
- Steven Cohen of Point72 Asset Management sold 2 million shares of Nvidia, trimming his position 50%. He also added 1.3 million shares of the iShares Bitcoin Trust, increasing his stake 49%.
These details come from Forms 13F filed with SEC. While those forms provide insight into what hedge fund managers are buying and selling, the information is somewhat outdated because the trades were made at least four months ago.
Here's a more current look at Nvidia and the iShares Bitcoin Trust.
Image source: Getty Images.
1. Nvidia
Nvidia is the market leader in data center graphics processing units (GPUs), chips used to accelerate complex workloads like training large language models (LLMs) and running artificial intelligence (AI) applications. "Nvidia sets the pace for AI infrastructure worldwide. Without Nvidia's GPUs, modern AI wouldn't be possible," according to Forrester Research.
Nvidia was battling a few headwinds that have since been resolved when billionaires Ken Griffin and Steven Cohen sold shares in the first quarter. Investors worried demand for Nvidia GPUs would slow after Chinese AI start-up DeepSeek reportedly used fewer and less powerful chips to develop LLMs rivaling those from U.S. companies. But demand has stayed robust because cost efficiencies have made AI accessible to more companies.
Additionally, the Commerce Department under former President Joe Biden announced a strict export control framework (called the AI Diffusion Rule) that would have limited Nvidia's ability to sell semiconductors in most countries. The Trump administration has since rescinded that rule and even restored Nvidia's ability to sell H20 GPUs in China.
Looking ahead, Grand View Research estimates AI spending across hardware, software, and services will increase at 35% annually through 2030. Nvidia remains one of the companies best positioned to benefit. Wall Street expects earnings to grow at 29% annually in the next three to five years, which makes the current valuation of 56 times earnings look tolerable. Patient investors should feel comfortable holding Nvidia stock for years to come.
NASDAQ: IBIT
Key Data Points
2. iShares Bitcoin Trust
The price of Bitcoin (BTC 1.50%) has rocketed 612% since January 2023. The cryptocurrency currently trades at $118,000 and has a market value of $2.3 trillion, but these Wall Street experts expect monster returns in the coming years.
- David Puell at Ark Invest has outlined a bull-case scenario in which Bitcoin hits $1.5 million by 2030. That implies 1,170% upside from its current price.
- Bernstein analyst Gautam Chhugani thinks Bitcoin will hit $1 million by 2033. That implies 745% upside from its current price.
- Tom Lee of Fundstrat Global Advisors recently told CNBC Bitcoin can hit $3 million or more in the long run. That implies 2,440% upside from its current price.
- Strategy (formerly known as MicroStrategy) chairman Michael Saylor thinks Bitcoin will be a $200 trillion asset by 2045. That implies 8,595% upside from its current market value.
Bitwise CIO says Bitcoin is the "largest, most liquid, and most established" cryptocurrency. Also, Bitcoin's fixed supply makes it a hedge against the inflation-driven devaluation of fiat currencies like the U.S. dollar, drawing comparisons to gold. Those qualities should encourage more retail investors and institutional investors to participate in the market in the years ahead.
Indeed, the Bitcoin supply held by public and private companies has increased more than 30% year to date due to the increasingly favorable U.S. regulatory environment under the Trump administration. Most notably, the president signed an executive order establishing a strategic Bitcoin reserve, which may eventually let the federal government buy Bitcoin.
Spot Bitcoin ETFs make it particularly easy to get exposure to the cryptocurrency. They let investors add Bitcoin to existing brokerage accounts without the high fees associated with cryptocurrency exchanges. For instance, the iShares Bitcoin Trust charges 0.25% per year, but Coinbase charges between 0.4% and 0.6% per transaction under $10,000.
Consequently, institutional investors are piling into newly minted spot Bitcoin ETFs. In fact, recently filed Forms 13F show the number of large asset managers (i.e., those with $100 million-plus in securities) with positions in the two largest spot Bitcoin ETFs -- iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund -- nearly tripled in the past year.
As a caveat, investors should never put too much confidence in forecasts because there is no guarantee Bitcoin reaches these prices. Also, prospective investors should be aware Bitcoin has historically been very volatile. Its price has dropped more than 50% from a record high three times in the last five years, and similar downturns are likely in the future.
Investors comfortable with those risks, especially those with a long time horizon, should consider adding Bitcoin exposure to their portfolios. The BlackRock iShares Bitcoin Trust is a cheap and convenient way of doing that.
