Veteran fund manager who predicted Nvidia stock rally makes surprising move

Nvidia (NVDA) shares climbed for five consecutive days this week, closing at a record high of $157.75 on June 27.

The rally has made the AI chipmaker the most valuable company again, with a market cap of about $3.85 trillion, ahead of Microsoft (MSFT) and Apple (AAPL) .

About three months ago, some pessimistic investors thought that Nvidia's stock had probably reached a dead end as it fell sharply amid macro uncertainties and trade policies. But the stock has gained 67% since its low in early April.

Nvidia was hit hard as the U.S. tightened export restrictions on advanced chips in April. The Trump administration said Nvidia would need an export license to ship the H20 processors to China. The H20 chip was designed under the Biden administration's rules.

The chipmaker took a $4.5 billion charge in the April quarter and said it would have made an additional $2.5 billion in revenue without the restriction.

Nvidia's CEO, Jensen Huang, has long warned that export controls could hurt U.S. chipmakers and even threaten the country’s position as the global leader in technology.

“If we want the American technology stack to win around the world, then giving up 50% of the world’s AI researchers is not sensible,” Huang recently said on CNBC.

Nvidia stock is up 15% year to date.

Image source: I-Hwa Cheng/AFP via Getty Images

What’s driving Nvidia shares higher?

Several developments have driven Nvidia’s rally since its April low. The stock first began to recover after the U.S. and China agreed to temporarily pause the elevated tariffs. Sentiment improved further when the Trump administration scrapped the Biden-era AI diffusion rule, which was another export control on advanced AI chips.

In May, shares got another boost from news that Nvidia would supply AI chips to Saudi Arabia’s Humain, a rising tech player in the region.

On May 28, Nvidia posted strong fiscal first-quarter results. Adjusted earnings came in at 96 cents per share on $44.06 billion in revenue, beating Wall Street’s estimates of 93 cents and $43.31 billion.

The company guided for $45 billion in revenue for the current quarter, just under analysts’ forecast of $45.9 billion. Nvidia said that number would have been roughly $8 billion higher without the ongoing export curbs to China.

This week’s rally was also helped by signs of easing U.S.-China trade tensions. Secretary of Commerce Howard Lutnick told Bloomberg that a trade deal with China has been finalized and signed.

The deals said China would ship rare earth metals to the U.S. in exchange for “countermeasure” removal. But it’s still unclear whether semiconductors are part of the deal, and chips remain a major sticking point in trade negotiations.

Fund manager sells Nvidia stocks amid rally

As Nvidia shares climbed, Chris Versace, a Wall Street veteran fund manager who oversees TheStreet Pro's portfolio, just sold part of his stake during the rally.

On June 26, Versace trimmed roughly 10% of the portfolio's Nvidia stake at $154.06. The gains were just over 100%.

Versace began his career in equity research and now has more than 30 years of experience. He started buying Nvidia stocks in February 2024. He had predicted Nvidia's rally earlier this year, buying more shares in the dip.

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“We remain bullish on the prospects for both companies, especially after Wednesday night’s quarterly earnings report and lifted outlook from Micron (MU) ,” Versace wrote in a note on TheStreet Pro, adding that he still intended to hold Nvidia shares to “maximize AI and data center build out and AI adoption related returns.”

Versace said the sale reflected his stance as a “disciplined investor,” adding that if Nvidia shares continue to rise and push the stock’s weight back to 4.5% of the portfolio, “we’ll look to lock in additional gains.” As of now, Nvidia makes up 4.19% of the portfolio.