The Investment Committee's Nvidia strategy: Kevin Simpson trims, Jim Lebenthal holds

Nvidia was the focus as the panel weighed a sharp selloff against still-strong fundamentals after Jensen Huang’s resignation as CEO and the market’s reaction to the succession news. One guest argued the stock is entering a tug of war between bulls and bears: bulls point to a strong order book, projected growth, and free cash flow above $300 billion, while bears focus on export controls and the risk that China business gets curtailed. The guest said that even with likely near-term volatility, the long-term case remains intact and new money is still being put into Nvidia.

Another panelist said the board moving quickly to line up ARM CEO Rene Haas could help stabilize the situation, but also warned that there are still major headwinds, including national security concerns and possible limits on where chips ultimately end up. The panel highlighted Nvidia’s reported 70-plus percent margins and roughly 10 times forward earnings as reasons the stock could still appeal on fundamentals.

Kevin Simpson said he sold half of his position based on price action alone, taking about a 20% loss from a $200 entry, even though he still likes the fundamentals. He said the departure of a visionary CEO matters, and that more developments are likely to come before the story settles.