Analysis-Nvidia investor dilemma: how much is too much in a stock portfolio?

FILE PHOTO: Foxconn to use
Nvidia chips to build self-driving platforms

NEW YORK (Reuters) - Outsized positions in artificial intelligence darling Nvidia have boosted portfolio managers' returns this year but the bets stand to magnify risk if the chipmaker's red-hot shares see a reversal of fortune. 

Nvidia shares are up about 785% since the start of 2023 and have risen some 160% this year alone, boosted by demand for its chips, seen as the gold standard in the AI field. Nvidia briefly became the world's most valuable company in June before a dip in its shares returned that title to Microsoft. 

Asset managers’ holdings of the chipmaker have swelled alongside its stock price. Morningstar data showed that 355 actively managed funds held Nvidia positions that totaled 5% or more of their assets at the end of the first quarter, compared to just 108 funds in the same period last year. Funds can maintain large positions in a single holding for a variety of reasons, whether to maximize profits or to track a stock’s weight in an index to which the fund is benchmarked.

 By David Randall.

Full story at Yahoo News.