We recently published a list of Joe DiMenna’s Stock Portfolio: Top 10 Stocks to Buy. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other top stocks to buy of Joe DiMenna’s portfolio.
Zweig-DiMenna Associates Inc. is a U.S.-based hedge fund with a legacy spanning four decades. Established in 1984 by Joseph A. DiMenna and Martin Zweig, the firm specializes in absolute return investing. Its strategies encompass fundamental long/short equities and global macro approaches, positioning it among the longest-running hedge funds in the industry. DiMenna serves as the Managing Director and Chief Investment Officer, overseeing the firm’s partnerships and investment funds.
DiMenna’s initiation into the financial world began as a college student in 1977 when he became a research assistant for renowned investor Martin Zweig. A keen student of stock markets since his early teens, DiMenna had been an avid reader of financial newsletters, particularly Zweig’s highly regarded The Zweig Forecast. He earned a B.S. in Finance from Fairfield University’s Dolan School of Business in 1980. Beyond his work in finance, he has contributed to various organizations, serving on the boards of the Harlem Children’s Zone, Orchestra of St. Luke’s, The Brearley School, The Gilder Lehrman Institute of American History, and the New York Historical Society.
Zweig, a Ph.D. in finance, was known for his data-driven market analysis and the development of key investor sentiment indicators, including the Put/Call ratio. His well-known investment maxims, such as “Don’t fight the Fed” and “Don’t fight the tape,” significantly influenced DiMenna’s approach. Their professional relationship began when DiMenna, impressed by Zweig’s insights, reached out to him with market ideas and a request for a college recommendation. This correspondence led to his recruitment as a research assistant, a role that involved extensive data analysis, often delving into market trends spanning over 50 years. Zweig remained a key figure in DiMenna’s career until his passing in 2013.
After graduating in 1980, DiMenna continued working with Zweig, refining market research techniques and stock selection strategies. He took on editorial responsibilities for a stock-focused newsletter and co-developed a mutual fund trading business based on market timing principles. By 1983, DiMenna proposed leveraging their expertise to launch a hedge fund, a relatively rare venture at the time, with fewer than ten such funds in existence. In 1984, they established the first Zweig-DiMenna partnership, followed by the launch of Zweig-DiMenna International Limited in 1987. Their approach combined long/short equity investing with macroeconomic risk management. DiMenna led the stock selection and investment process, while Zweig focused on broader market conditions, shaping strategies that DiMenna implemented.
The fund quickly gained prominence for its strong returns. In 1999, BusinessWeek recognized DiMenna as “one of the best stock-pickers no one has ever heard of,” highlighting the fund’s impressive 15-year annualized return of 25% after fees, significantly outperforming the broader market’s 18.6% annualized total return.
DiMenna’s achievements earned him several accolades. In 2002, the National Foundation for Teaching Entrepreneurship named him “Entrepreneur of the Year” for his contributions to financial education. The Zweig-DiMenna International hedge fund won Absolute Return Magazine’s “U.S. Equity Fund of the Year” award in 2007 after delivering an 82.25% annual return, far surpassing industry peers. In 2008, Alpha Magazine ranked DiMenna 13th on its list of top moneymakers, citing his $450 million earnings in 2007 and his fund’s consistent double-digit annual returns between 2002 and 2007.
Our Methodology
The stocks discussed below were picked from Zweig-DiMenna Associates’ Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1008 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
NVIDIA Corporation (NVDA): Among Top Stocks to Buy from Joe DiMenna’s Portfolio
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
Zweig-DiMenna Associates’ Equity Stake: $63.19 Million
NVIDIA Corporation (NASDAQ:NVDA) delivered an exceptional financial performance in its latest quarter, ending October 27, 2024, with revenue soaring 94% year over year to $35.08 billion. Earnings per share also experienced substantial growth, rising 103% to $0.81 compared to the same period in 2023. This impressive expansion highlights the company’s strong market position and continued dominance in AI, gaming, and data center technologies. Additionally, the company announced a quarterly cash dividend of $0.01 per share, reinforcing its commitment to shareholder returns while maintaining a trajectory of rapid growth.
In the fourth quarter of 2024, Zweig-DiMenna Associates expanded its stake in NVIDIA Corporation (NASDAQ:NVDA) to 470,545 shares, reflecting a 2% increase from the previous quarter. This holding, now valued at approximately $63.19 million, represents 4.72% of the firm’s portfolio, making NVIDIA its third-largest investment. Institutional interest in the stock also surged, with 223 hedge funds tracked by Insider Monkey holding positions worth nearly $61.15 billion by the end of Q4, up from 193 funds in the prior quarter. The growing hedge fund investment underscores strong confidence in NVIDIA’s growth potential, solidifying its position as a top stock choice.
Alger Spectra Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality, and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super-computing parallel processing techniques for solving complex computational problems. In our view, Nvidia’s computational power is a critical enabler of AI and therefore essential to AI adoption. Shares contributed to performance during the quarter, driven by strong demand for its data center products, especially the Hopper H200 chips, which generated double-digit billions in revenue, marking the fastest product ramp in the company’s history. Management provided fiscal fourth-quarter revenue guidance above analyst estimates, along with resilient operating margins supported by robust demand and limited competition. In our view, Nvidia’s leadership in scaling AI infrastructure, including advancements in inference and test-time scaling (i.e., reasoning during inference), is driving adoption among enterprises and startups, providing continued demand for its high-performance chips and software solutions. As older-generation chips are repurposed for inference and new clusters are deployed, we believe Nvidia is well-positioned to capitalize on growing compute needs across AI applications.”
NVIDIA’s exceptional financial growth, with a 94% year-over-year revenue surge and a 103% rise in earnings per share, underscores its dominance in AI, gaming, and data centers. With increasing institutional investment and strong demand for its cutting-edge GPUs—especially in AI and high-performance computing, NVIDIA Corporation (NASDAQ:NVDA) remains a top stock choice, poised for continued expansion in key growth sectors.
Overall, NVDA ranks 3rd on our list of top stocks to buy of Joe DiMenna’s portfolio. While we acknowledge the potential for NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
