Nvidia (NVDA.US), long dominant in the data center AI chip sector and hailed as "the most important stock on Earth," became a target of deep market selling in the second half of this year. However, Impax Asset Management, a European asset management giant, is quietly seizing the significant opportunity to "buy the dip," establishing a position in Nvidia shares that the institution has long regretted not holding.

The London-based asset management firm, with a total scale of $50 billion under management, has its CEO and founder Ian Simm stating that he and his investment team have long been looking for an opportunity to correct a significant mistake they realized – that is, the institution missed Nvidia's shocking 800% epic rise since the beginning of 2023, which stunned the world, and failed to reap an 800% return from the soaring value of Nvidia's stocks.

Advertisement

"We did indeed underestimate the vast market potential of their hardware products in the past," Simm said in a recent media interview. Impax has long been looking for the right way to follow this unprecedented AI investment boom, but Nvidia was "expensive." "That is to say, until it was sold off, we had the opportunity to enter this field."

Since the second half of this year, Nvidia's stock price has once fallen into a state of sharp decline, leading its market value to plummet from its peak to a trough, with a market value reduction of nearly $1 trillion. However, the significant pullback in Nvidia's stock price provided Impax, which missed Nvidia's epic rise, with an excellent opportunity to buy the dip. Although most of the deep decline in Nvidia's stock price has been recouped, Simm said he believes that the current market value of the tech giant, which exceeds $3.2 trillion, is still severely underestimated, indicating that its actual value is far more than this figure.

Nvidia's stock price once sat steadily on the throne of "the world's most valuable publicly traded company" this year, but in the second half of the year, it fell into a correction due to the unclear prospects of AI monetization and global macro policy turmoil, and its stock price once fell into a sharp decline.

It is understood that Impax, established in 1998, is best known for its institutional investor identity in green transformation. Among the many asset management companies focusing on a more sustainable economic transformation, it has become a rising asset management giant. Unlike the strategy of chasing market hot trading trends that most Wall Street asset management institutions are good at, Impax has long focused on green transformation investment. However, as the AI investment boom sweeps the world, this conservative European asset management giant has also begun to chase this trend in order to achieve stronger asset management returns.

In the past few years, energy crises such as soaring interest rates and the comprehensive rise of the so-called Magnificent Seven in the US stock market have made green investment an almost completely failed bet. Due to the continued sluggish performance of renewable energy-related stock benchmarks, Impax Asset Management's own stock price has fallen nearly 30% in the European stock market this year, while the S&P Global Clean Energy Index has also fallen by more than 10%. At the same time, the US stock benchmark - the S&P 500 Index - has risen by more than 20% during the same period, continuing the bull market since 2023 driven by the AI boom.

This $50 billion asset management giant is using real money to buy Nvidia at a low price.

Earlier this week, the results of Impax's performance report showed that for the fiscal year ending September 30, the asset management giant's stock gains were about £5.3 billion (about $6.9 billion). Nevertheless, this is still lower than the net outflow of £5.8 billion that Impax suffered during the same period.

Simm said in an interview that Impax is learning from the lessons of the past few years and is paying more attention to large technology companies such as Nvidia and Microsoft, as it is looking for undervalued market opportunities to generate greater returns."Frankly speaking, our main investment strategy has not performed well over the past few years, as we have been more inclined to achieve growth at a reasonable price, staying away from the momentum and hype surrounding large US technology investments," he stated.

According to data compiled by the institution, during the sharp decline in NVIDIA's stock price in June, Impax可谓是 buying NVIDIA shares at a low price with real money, trying to seize the global AI investment boom. The data shows that Impax's holdings in the chip giant increased from just 14 million shares at the end of the first quarter to 49 million shares by the end of June, more than doubling, and this data has been officially confirmed by Impax.

In recent media interviews, Shim has repeatedly stated that considering the boom of artificial intelligence is expected to drive the market's fervent demand for its AI GPUs, Impax still believes that NVIDIA is seriously undervalued.

Shim said that holding NVIDIA shares is also reasonable from a climate and green transformation perspective, because like other technology giants, NVIDIA's core hardware products will also need to consume a large amount of renewable energy in the future to drive its growth. He said that as the demand for renewable energy continues to increase, NVIDIA and other technology companies developing higher-performance chips and AI large models will be more beneficial to the global environment and green transformation trends.

NVIDIA said at an important event earlier this month that the chip giant will start delivering a large number of new AI GPUs with the Blackwell architecture to large customers such as Amazon and Microsoft in the fourth quarter of this year, and said that it has been optimized to only need 3 gigawatts of electricity to develop OpenAI's GPT-4 AI large model. The chip giant said that ten years ago, this process required as much as 5500 gigawatts. "NVIDIA's ability to save energy makes its stock price more valuable," Shim said.

Impax holds NVIDIA shares in five classic strategies and different funds. This includes its "Global Opportunities Portfolio," which is limited to 40 stocks and consists of companies with diversified business models, operating in high-growth markets, and "not overly favored by the market for any reason." Shim said that Microsoft (MSFT.US), which belongs to the "Magnificent Seven" camp, is also included because Impax believes that "under the long-term trend of continuous iteration and development of artificial intelligence technology," Microsoft's actual value is underestimated.

Relying on its status as a major shareholder of OpenAI, Microsoft has embedded OpenAI's flagship AI large models such as GPT-4 into its Office series and other flagship application software, as well as the Microsoft Azure cloud platform, becoming the absolute leader in the global AI application field. Its performance and stock price have been continuously increasing since 2023, once sitting steadily on the "world's highest market value listed company" throne. However, Shim believes that Microsoft's current market value of about $3.1 trillion is still underestimated.

In fact, the "entire industrial space" in the world now appears to be underestimated, Shim said. He said that as the possibility of the "US economy achieving a soft landing" becomes greater, this situation may change, which will help restore the confidence of global investors. "The cost of capital is falling rapidly, and consumer sentiment is stabilizing, so stock investment looks more attractive," Shim said.

A series of heavy benefits in recent days have quietly pushed NVIDIA's stock price close to its historical high.

NVIDIA CEO Huang Renxun said at an event in early October that the market demand for Blackwell architecture products is "very crazy," and recently, many global technology companies have shown their business progress, and they cannot avoid NVIDIA's cutting-edge AI GPU servers. In addition, the optimistic forecast of Wall Street financial giant Citi for data center spending has jointly pushed NVIDIA's stock price close to its historical high this week.As global stock markets fluctuate at high levels, NVIDIA, the AI GPU hegemon in the AI infrastructure field, known as the "picker seller," has quietly risen to near its historical peak. Before NVIDIA's stock price closed lower on Thursday, it had risen strongly for five consecutive trading days. On Tuesday, it once surged to $133.480 during the US stock market trading, with a cumulative increase of 14% over five days, getting closer and closer to its historical peak of $140.747.

Foxconn, a giant in high-end electronic product contract manufacturing from Taiwan, China, held its annual Technology Day on Tuesday, during which it revealed that the company is building a large artificial intelligence server manufacturing infrastructure in Mexico to meet the global demand for NVIDIA's latest GB200 AI GPU hardware system.

Liu Yangwei, the chairman of Foxconn, said at the conference that, as NVIDIA CEO Huang Renxun said, the market demand for the most cutting-edge AI servers - AI servers equipped with Blackwell architecture AI GPUs - is very crazy, and the production capacity of the company's Mexican factory will be huge. The company is also using NVIDIA's Omniverse digital twin application software to build a highly automated large manufacturing factory in Mexico, that is, using AI to create a factory that produces AI servers.

Almost at the same time, Azure, a cloud computing service platform under Microsoft, posted an article to "show off" that the giant has obtained NVIDIA AI server systems equipped with GB200 AI GPUs. Azure's cloud platform officials even emphasized that the platform is the first large technology company among global cloud computing service providers to successfully equip servers with Blackwell architecture AI GPUs.

According to the latest forecast data from Citigroup, by 2025, the capital expenditure related to data centers of the four largest technology giants in the United States is expected to increase by at least 40% year-on-year. These huge capital expenditures are basically linked to generative artificial intelligence, meaning that the computing power demand for AI applications such as ChatGPT is still huge. Citigroup said that this means that the giants' expenditure on data centers is expected to continue to expand on the already strong expenditure scale of 2024, and the institution expects this trend to continue to bring very heavy positive catalysts to the stock prices of data center AI GPU hegemon NVIDIA and data center interconnection (DCI) technology providers. NVIDIA, whose stock price has "five consecutive increases" in recent days, is preparing to冲击 a new high.

The four major technology giants referred to in Citigroup's research report are the global cloud computing giants Amazon, Google, and Microsoft, plus Meta Platforms, the parent company of social media Facebook and Instagram. In this latest research report, Citigroup estimates that by 2025, the capital expenditure scale of these four major technology giants' data centers will increase by 40% to 50% year-on-year. Wall Street banks such as Citigroup have a high bullish sentiment on NVIDIA, generally betting that NVIDIA's stock price is expected to break through the $150 mark in the next 12 months.

The current demand for AI chips is extremely strong and may be so for a long time in the future. TSMC's management recently said at a performance statement meeting that the advanced packaging capacity of CoWoS S/L/R required for AI chips is expected to continue to be in short supply until 2025, and there may be a slight easing in 2026. In addition, this core chip manufacturer of NVIDIA and Apple recently announced that its sales for the quarter ending in September were 759.7 billion New Taiwan dollars (about $23.6 billion), higher than the average expectation of 748 billion New Taiwan dollars by analysts. This also means that TSMC's overall sales in the third quarter increased by 36.5% year-on-year, obviously exceeding TSMC's forecast range in July, showing that the demand for the core infrastructure of artificial intelligence - chips - is still very strong.