Investors concerned about being overexposed to Nvidia may want to replace the name with one of these stable growth stocks, according to Trivariate Research’s Adam Parker. Nvidia’s earnings next month could be the “most important holdout” of this earnings season, as strong guidance from the semiconductor maker could mean there is still headroom in the artificial intelligence industry. “This is likely to be a data point,” Parker wrote on Sunday. “Even if NVDA reports that demand remains strong as far as the eye can see, it remains prudent to own semiconductors exposed to AI,” Parker said. NVDA 1Y Over the past year, he has piled on Nvidia stock.But for investors worried that Nvidia will exit, it may be time to find an alternative to the stock, he says. Parker continued. Nvidia stock has enjoyed an impressive run this year, rising more than 80%, but has fallen slightly this month on concerns that the macroeconomic downturn could finally take a toll on the stock. “Changes in financial conditions will create further volatility,” Parker wrote. “For investors who are performing well and are worried about losing alpha gained year-to-date due to pending rotations, it would be wise to look for growth stocks with positive alpha and low correlation to NVDA. The strategists screened for large-cap growth stocks with negative or low correlations to Nvidia and positive beta-adjusted returns since early 2023. Positive beta-adjusted returns refer to a stock’s ability to outperform the market after adjustments. Because of volatility. “For those looking to avoid aggressive bets on AI and semiconductors, this group looks prudent,” Parker wrote. I would like to introduce some of the stocks. Berkshire Hathaway has emerged as a large-cap growth stock with low correlation to Nvidia, which also has the potential to outperform the market. The stock is up more than 12% this year. Eli Lilly appeared on the screen. Pharmaceutical stocks have soared more than 30% this year, and some on Wall Street are predicting even more growth. Citi said earlier this month that Eli Lilly could “continue riding the GLP-1 rocket” and raised its price target to $895 from $675. The stock’s closing price on Friday was $751.64. Charles Schwab was also a large growth stock with low correlation to Nvidia. The financial services company’s stock price hit a new intraday high on Monday, suggesting the stock is trending higher. The stock is up more than 5% this year. Waste Management and Emerson Electric also appeared on screen.
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