While some strategists say to “buy high, sell higher<\/a>” on Nvidia stock, Terry Smith is staying away from Nvidia altogether.<\/p>\n Smith has been called Britain’s Warren Buffett<\/a>; he manages the \u00a322.8 billion<\/a> ($29.33 billion) Fundsmith Equity Fund.<\/p>\n He has chosen not to invest in Nvidia, the world’s largest company<\/a> with a market cap of over $3.5 trillion<\/a> at the time of writing because he says consumers haven’t shown that they’re willing to pay for AI.<\/p>\n “I’m not confident that we know what the future of AI is because there are almost no applications people are paying for,” Smith told Bloomberg last week<\/a>. “Will they be willing to pay on a sufficient scale and a sufficient price to justify this? Because if not, the suppliers of the chips are going to have a problem.”<\/p>\n Related: <\/b>Nvidia’s Immense Market Power Is Worrying Investors \u2014 Here’s Why<\/a><\/p>\n A recent survey shows that people are unwilling to pay extra for AI processors and other hardware: 84% of over 22,000 PC users<\/a> surveyed in May by TechPowerUp said that they would not pay more for hardware with AI features.<\/p>\n Yet another data point shows that users are willing to pay for AI products in some cases. Over 11 million people<\/a> are opting to pay for ChatGPT; an August report estimates that OpenAI makes an estimated $3.4 billion<\/a> in annual revenue from ChatGPT subscriptions.<\/p>\n Nvidia CEO Jensen Huang has stated that he personally pays for ChatGPT<\/a> and uses it as a personal tutor.<\/p>\n Smith’s decision to not invest in Nvidia has caused his fund to miss out on Nvidia’s high returns. The Fundsmith Equity Fund saw a 9.3% return<\/a> between January 1 and June 30; it underperformed compared to the MSCI World Index, which made 12.7% over the same six-month period.<\/p>\n Smith said that it was “difficult” to reach the MSCI World Index return without owning Nvidia, but defended his stance to stay away from the stock: “We do not own any Nvidia as we have yet to convince ourselves that its outlook is as predictable as we seek,” he wrote<\/a> at the time.<\/p>\n Fundsmith Equity has a stake in other tech stocks, including Apple, Meta, and Microsoft.<\/p>\n Related: <\/b>Nvidia Was Once 30 Days Away From Going Out of Business. Here’s Why It Just Overtook Apple to Become the World’s Biggest Company.<\/a><\/p>\n While Smith may have his reasons for not investing in Nvidia, the company remains one of the world’s most sought-after AI chip suppliers, with anywhere from 70% to 95%<\/a> of the AI chip market. Huang spoke recently about the “insane demand” the company faced when it came to its latest Blackwell AI chip.<\/p>\n “Everybody wants to have the most, and everybody wants to be first,” he stated last month<\/a>.<\/p>\n Nvidia is one of the “Magnificent Seven,” a group of tech stocks that also includes, Amazon<\/a>, Apple, Meta, Microsoft<\/a>, Google<\/a>, and Tesla.<\/p>\n Nvidia is not only a part of the Magnificent Seven, but many members of the group are also clients: Amazon, Meta, Microsoft, and Google are responsible for more than 40%<\/a> of Nvidia’s revenue.<\/p>\n![\"\"](\"https:\/\/assets.entrepreneur.com\/images\/misc\/1731356967_Jensen-Huang-GettyImages-2174947794.jpg?width=1000\")
Nvidia CEO Jensen Huang. Photo by Chip Somodevilla\/Getty Images<\/i><\/sup><\/p>\n