Tiger 21, a network of ultra-high-net-worth investors and entrepreneurs, recently released its second-quarter asset allocation report, revealing that more than half of its members do not invest in chip darling Nvidia. The report showed that 57% of members are not invested in Nvidia, with many stating that they do not intend to start a position in the company. Tiger 21, founded in 1999 by Michael Sonnenfeldt, boasts members with a collective personal wealth of over $165 billion, who share advice on wealth preservation, investments, and philanthropy. The network has 123 groups in 53 markets and over 1,450 members.
Of the 43% of Tiger 21 members who have invested in Nvidia, most do not plan to increase their holdings amid concerns that the stock has already reached lofty levels. These fears seem to have been justified, as Nvidia’s stock recently experienced a significant drop, losing 9.5% overnight and wiping $300 billion off its market capitalization. Additionally, 43% of surveyed club members believe Nvidia’s success may not last the next decade, leading some to avoid technology investments altogether in favor of real estate or other sectors.
While Nvidia has been praised as ‘the world’s most important stock’ due to its role in the artificial intelligence boom, some Tiger 21 members choose to steer clear of the stock due to its volatility and risks associated with tech investments, despite its impressive growth. Sonnenfeldt noted that while Nvidia is currently the leader in AI, some members believe that competitors will eventually catch up, as seen in the example of Tesla and EV offerings from major auto manufacturers. The club’s focus remains on preserving wealth rather than chasing high returns, leading to cautious investment decisions.
Nvidia’s meteoric rise, surging almost nine-fold since the end of 2022 to reach a $3 trillion market cap earlier this year, hit a stumbling block this summer as the stock tumbled about 27% from its all-time high in June. The semiconductor giant led a sell-off in tech stocks on Wall Street, with shares continuing to slide in extended trading. Despite Nvidia’s struggles, Sonnenfeldt remains optimistic about the broader AI industry, calling it one of the most investible themes in financial history.
The recent member allocation report from Tiger 21 revealed that private equity is the largest allocation for members at 28%, followed by real estate at 26% and public equities at 22%. Despite challenges such as high interest rates, real estate remains a significant portion of members’ portfolios, indicating a continued interest in the sector. The report highlights the diverse investment strategies and preferences of Tiger 21 members, who prioritize wealth preservation and prudent investing decisions over chasing high returns.
