Massive Installed Base Drives End-Market Stability for Nvidia Corp. (NVDA)

Massive Installed Base Drives End-Market Stability for Nvidia Corp. (NVDA)

Fri, August 28, 2026 at 5:41 PM GMT+3 3 min read

• NVDA -1.36%

Rothschild & Co Asset Management, an investment management company, released its "LongRun Equity Strategy" second-quarter 2026 investor letter. The letter can be downloaded here. The fund focuses on acquiring high-quality franchises for the long term, focusing on companies with strong competitive positions and sustainable business models. The strategy increased 7.6% (in EUR, unhedged) in the second quarter compared to its benchmark, which increased 15.8%. The market rebounded from March lows amid geopolitical tensions, with AI-related stocks gaining traction during negotiation breakdowns. While earnings upgrades have supported the broad index, many businesses outside the AI sector face stagnant revisions. The fund's EPS growth remains strong, suggesting that a market rotation towards overlooked quality stocks is due. Also, check the fund's top five holdings to see its best picks in 2026.

In its second-quarter 2026 investor letter, LongRun Equity Strategy highlighted NVIDIA Corporation (NASDAQ:NVDA) as a new holding. NVIDIA Corporation (NASDAQ:NVDA) is a leading data center-scale AI infrastructure company operating through Compute & Networking and Graphics segments. On August 27, 2026, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $227.98 per share. The one-month return of NVIDIA Corporation (NASDAQ:NVDA) was 13.56%, and its shares gained 30.89% over the past 52 weeks. NVIDIA Corporation (NASDAQ:NVDA) has a market capitalization of $5.51 trillion.

LongRun Equity Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2026 investor letter:

"We added two new positions during the quarter: Amphenol, the investment case of which is outlined later in this report, and NVIDIA Corporation (NASDAQ:NVDA). Nvidia's profile has changed over time. End markets are now more stable due to the massive installed base built up over the years.

Moreover, thanks to CUDA, Nvidia's software ecosystem for accelerated computing, switching costs are high, as moving to an alternative would cause enormous disruption given the depth of the developer tools and application libraries. It remains the go-to platform, ensuring that Nvidia will enjoy a healthy replacement cycle. Furthermore, its architectural design delivers superior performance for the power consumed. The stock has de-rated despite becoming fundamentally even stronger, and we are taking the opportunity to build a position."

NVIDIA Corporation (NASDAQ:NVDA) is in fourth position on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026.As per our database, 285 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the second quarter, which was 275 in the previous quarter. While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we discussed NVIDIA Corporation (NASDAQ:NVDA) and highlighted Jim Cramer's views on the company. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.