A recent asset allocation report from the network of ultra-high-net-worth investors and entrepreneurs, Tiger 21, has shed light on some surprising insights. More than half of Tiger 21’s members have chosen not to invest in chip darling Nvidia. The report revealed that a staggering 57% of members have steered clear of investing in Nvidia. One of the main reasons cited by these members is the belief that while Nvidia may currently be the leader in AI, the constant evolution of technology means that competitors could catch up, leading to a recalibration of the market.
Tiger 21’s members collectively have personal assets worth over $165 billion, showcasing the immense wealth within the network. The group, founded in 1999 by Michael Sonnenfeldt, provides a platform for members to share advice on wealth preservation, investments, and philanthropic endeavors. With 123 groups in 53 markets and over 1,450 members, Tiger 21 is a significant player in the world of ultra-high-net-worth investors.
Of the 43% of members who have invested in Nvidia, many are hesitant to increase their stake in the company. Concerns about the stock being overvalued and fears of a market downturn have deterred these members from pouring more funds into Nvidia. As predicted, Nvidia’s stock experienced a significant drop of 9.5%, wiping out a substantial $300 billion of its market cap, highlighting the risks associated with investing in such high-growth stocks.
Some Tiger 21 members have opted to avoid technology investments altogether, with Nvidia being a notable omission from their portfolios. These members have instead chosen to focus on sectors like real estate, which provide more stability and predictable returns compared to the volatile tech industry. The rapid rise and subsequent saturation of the EV market following Tesla’s success serve as a cautionary tale for these members, who believe that Nvidia’s dominance could be short-lived in the face of increasing competition.
Sonnenfeldt emphasized that Tiger 21 members prioritize wealth preservation over chasing high returns, explaining their cautious approach towards investing in volatile tech stocks like Nvidia. Despite Nvidia’s impressive growth and status as ‘the world’s most important stock,’ many members remain skeptical about its long-term sustainability and are wary of the risks associated with tech investments.
Nvidia’s meteoric rise to a $3 trillion market cap earlier this year was fueled by the artificial intelligence boom, solidifying its position as a tech giant. However, the company’s stock price took a hit in the summer, declining by 27% and failing to maintain its all-time high. Amid a broader sell-off in U.S. markets, Nvidia’s shares continued to slide, reflecting the inherent volatility of the tech sector.
Despite these challenges, Sonnenfeldt remains optimistic about the wider AI industry, describing it as one of the most investible themes in financial history. While some Tiger 21 members may be cautious about investing in individual tech stocks like Nvidia, the potential of AI technology as a whole continues to attract interest and investment within the network.
Real estate remains a popular choice among Tiger 21 members, comprising 26% of their investment portfolios. Despite high interest rates and market uncertainties, real estate offers stability and long-term growth potential that appeals to the network’s wealthy individuals. Public equities make up 22% of members’ asset allocation, reflecting a diverse investment strategy that seeks to balance risk and reward across different sectors and asset classes.