Billionaires, Analysts Align Behind Nvidia for 2026

December 27, 2025 at 19:12 UTC

5 min read

Nvidia stock growth visualization with AI chip exports to China and hedge fund backing

Key Points

Top hedge fund managers have concentrated AI bets led by Nvidia and hyperscalers
New U.S. approval to ship H200 chips to China could reopen a major Nvidia market
Analysts see Nvidia as undervalued relative to its growth and sector peers
Secondary chip and hardware suppliers are emerging as key AI beneficiaries

Billionaire Funds Cluster Around Core AI Leaders

Recent regulatory filings and portfolio disclosures show several prominent hedge fund managers concentrating heavily in a small group of artificial intelligence (AI) leaders, with Nvidia at the center. Chase Coleman’s Tiger Global Management has built what he calls an alternative “Magnificent Seven,” focused squarely on AI infrastructure. As of the third quarter, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms, Taiwan Semiconductor Manufacturing (TSMC), and Broadcom together made up 46.2% of Tiger Global’s portfolio, with Microsoft alone accounting for 10.5%. Notably, Apple and Tesla are absent from this grouping, with Coleman instead favoring TSMC and Broadcom as key AI chip and manufacturing plays. Philippe Laffont’s Coatue Management has taken a similar approach. About a third of Coatue’s portfolio is invested in six large AI names: Meta, Microsoft, TSMC, Amazon, Nvidia, and Alphabet, which together represent 32.2% of assets. Laffont’s positioning reflects a view that both infrastructure providers such as Nvidia and TSMC, and hyperscalers like Meta, Microsoft, Amazon, and Alphabet, are well placed to benefit from sustained AI data center spending into 2026.

Nvidia Demand, Backlog and China Reopening Shape 2026 Outlook

Multiple reports highlight that Nvidia continues to face exceptionally strong demand for its graphics processing units (GPUs) used in AI data centers. The company has told investors it is “sold out” of cloud GPUs, and its data center revenue reached $51.2 billion in its fiscal third quarter 2026, up 66% year over year. Nvidia projects global data center capital expenditures could rise from about $600 billion in 2025 to $3 trillion to $4 trillion annually by 2030, underscoring expectations for a prolonged AI buildout. A key new development is the reopening of the Chinese market for Nvidia’s advanced H200 data center GPUs. Following U.S. President Donald Trump’s approval for sales to approved Chinese customers, Reuters reported that Nvidia has informed Chinese clients it plans to begin shipping 40,000 to 80,000 H200 chips before the mid‑February 2026 Lunar New Year, using existing inventory. At an estimated price of around $32,000 per chip, that implies potential first‑quarter fiscal 2027 Chinese revenue of $1.28 billion to $2.56 billion, though Nvidia has agreed to remit a quarter of its Chinese revenue to the U.S. government. Nvidia is also expected to add production capacity dedicated to Chinese customers, with orders for that capacity to begin in the second quarter of 2026. Analysts note that this reopening comes on top of an already large data center order backlog, cited at about $275 billion for 2026 in one report and over $500 billion for chips and networking in another, suggesting substantial revenue visibility into next year.

Analysts Call Nvidia ‘Cheap’ as Billionaires Add Exposure

Despite strong fundamentals, several analysts argue Nvidia’s valuation has compressed to attractive levels. Bernstein’s Stacy Rasgon reiterated an “Outperform” rating with a $275 price target, estimating Nvidia trades at about 25 times forward earnings, which the firm says places the stock in roughly the 11th percentile of its own 10‑year valuation range and at a discount to the broader semiconductor index. Another article notes Nvidia trades at 24 times next year’s earnings in one comparison and 38 times forward earnings in another, both framed as reasonable given its growth profile. Cantor Fitzgerald has named Nvidia a top pick for 2026, citing a new AI demand inflection, next‑generation architectures such as Blackwell and Vera Rubin, and a reset in valuations. Tigress Financial has raised its price target to $350 and calls Nvidia the “premier AI investment,” pointing to its dominance in data center computing and expanding use cases. Separately, David Tepper’s Appaloosa Management increased its Nvidia stake from 300,000 shares at the end of the first quarter of 2025 to 1.9 million shares by the end of the third quarter, making it the fund’s fourth‑largest holding. Commentators link this move to Nvidia’s expectation that global data center capex could reach up to $4 trillion annually by 2030 and to the company’s view that demand for AI computing power will persist for years.

China Approvals Also Lift AMD, While Niche Suppliers Gain Attention

The evolving U.S. export regime for AI chips to China is influencing expectations not only for Nvidia but also for Advanced Micro Devices (AMD). Raymond James recently reiterated an “Outperform” rating on AMD, arguing that both AMD and Nvidia could see moderate upside from approvals to resume GPU sales to China. In an optimistic scenario, the firm estimates AMD could gain $500 million to $800 million in revenue and $0.10 to $0.20 in non‑GAAP earnings per share in 2026, while Nvidia could see $7 billion to $12.5 billion in additional revenue and $0.15 to $0.30 in non‑GAAP EPS. AMD has separately outlined a five‑year plan targeting a 60% compound annual growth rate in its data center division and 10% growth in its consumer and embedded segments, implying a 35% overall revenue CAGR. At the same time, Bank of America highlights a group of smaller semiconductor and equipment companies as “unsung heroes” of the AI buildout. Analyst Vivek Arya points to Credo, Astera Labs, MKS Instruments, Advanced Energy, MACOM, and Teradyne as key beneficiaries of spending on networking, interconnects, power systems, and chip manufacturing and testing. BofA estimates the AI data center systems market could exceed $1.2 trillion by 2030, with about $900 billion tied to accelerators and roughly $300 billion to supporting technologies, suggesting a broad ecosystem of companies stands to gain from the same AI trends driving Nvidia’s outlook.

Key Takeaways

Large hedge funds are converging on a similar core of AI infrastructure and hyperscaler stocks, with Nvidia central to many of these concentrated portfolios.
Nvidia enters 2026 with strong GPU demand, a sizable data center backlog, and a path to restore Chinese revenue via H200 shipments, adding to already high visibility.
Valuation compression has led several major analysts to characterize Nvidia as inexpensive relative to its history and sector, even as earnings estimates rise.
Policy shifts on AI chip exports to China are emerging as a shared catalyst for both Nvidia and AMD, while also reinforcing long‑term demand expectations.
Bank of America’s focus on networking, power, and testing firms underscores that the AI investment cycle is broadening beyond headline chipmakers into the wider hardware stack.