A group of high-profile hedge fund managers, including Israel Englander of Millennium Management and Paul Tudor Jones of Tudor Investment, sold shares of Nvidia during the fourth quarter and purchased the SPDR Gold Shares ETF, which has surged 166% in the last decade. This move may seem counterintuitive, given Nvidia’s dominant position in the AI accelerator market, but there are several factors to consider.

• Nvidia’s recent struggles against Chinese start-ups and export restrictions on its GPUs in China may have led hedge fund managers to reassess their positions.
• The Trump administration’s tariffs on Nvidia could result in significant revenue losses for the company.
• The SPDR Gold Shares ETF has historically provided a hedge during periods of large market drawdowns, systemic risk, and geopolitical volatility.

Nvidia: A Dominant Player in the AI Accelerator Market

Nvidia is a leader in accelerated computing, a discipline that uses specialized hardware and software to speed up complex data center workloads like scientific computing and artificial intelligence (AI). The company specializes in graphics processing units (GPUs), which are also known as AI accelerators, and holds an 84% market share in this area. However, Nvidia also provides adjacent hardware and software. Despite recent struggles, Nvidia’s market share in the AI accelerator market is expected to increase at 29% annually through 2030, according to Grand View Research. This growth is driven by the increasing adoption of AI in various industries, as well as the cost efficiencies that let more businesses adopt AI.

The recent struggles of Nvidia against Chinese start-ups and the Trump administration’s export restrictions on its GPUs in China may have led hedge fund managers to reassess their positions. However, it is essential to note that neither Israel Englander nor Paul Tudor Jones completely exited their position in Nvidia, so they still have exposure to the chipmaker in their portfolios. Wall Street estimates Nvidia’s earnings will increase 46% in fiscal 2026, which makes the current valuation of 36 times earnings look rather cheap. This suggests that investors with a time horizon of at least three years can buy a position in this stock now. SPDR Gold Shares: A Hedge Against Market Volatility

The SPDR Gold Shares ETF tracks the price of gold bullion and has surged 166% in the last decade. The fund is managed by State Street and owns approximately 946 metric tons of gold, which is worth more than $100 billion at the current spot price. The ETF allows investors to participate in the gold market without the hassle of buying, storing, and insuring physical bullion. “Gold has demonstrated a low and negative correlation to many financial asset indices over time and has a track record of providing a hedge during periods of large market drawdowns, systemic risk, and geopolitical volatility,” according to State Street. The SPDR Gold Shares ETF has historically provided a hedge during periods of large market drawdowns, as evidenced by the following:

1. Bear markets: Gold returned an average of 6% during the last four bear markets, while the S&P 500 declined by an average of 36%.
2. Bull markets: Gold returned an average of 61% during the last four bull markets, while the S&P 500 returned an average of 150%.

In 2025, the SPDR Gold Shares ETF has advanced 28% year to date, while the S&P 500 has declined 6%. This discrepancy is largely due to economic uncertainty, with many economists raising their recession probability forecasts. As a result, investors have moved away from risk assets like stocks and toward safe-haven assets like gold. If President Trump’s tariffs push the S&P 500 into a bear market, gold will likely continue to outperform. However, if the administration reaches trade deals with a sufficient number of foreign countries, the current bull market could regain momentum, in which case gold would likely underperform. This makes the SPDR Gold Shares ETF a smart buy for any investor concerned about a more substantial drawdown in the S&P 500. By diversifying their portfolios with this ETF, investors can hedge against market volatility and potentially benefit from the precious metal’s historical performance. In conclusion, the hedge fund billionaires who sold Nvidia and bought gold are taking a contrarian approach to investing. While Nvidia’s market share in the AI accelerator market is expected to increase, the recent struggles of the company against Chinese start-ups and the Trump administration’s export restrictions on its GPUs in China may have led hedge fund managers to reassess their positions. The SPDR Gold Shares ETF, on the other hand, has historically provided a hedge during periods of large market drawdowns, systemic risk, and geopolitical volatility. As investors, it is essential to consider these factors and make informed decisions about their portfolios.