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Nvidia (NASDAQ: NVDA) recently became the world’s first firm to hit a $4trn valuation. Since then, the stock has chugged higher, and the chipmaker is now a $4.23trn behemoth. For context, that extra bit on the end is roughly equivalent to the market cap of AstraZeneca.
In other words, Nvidia’s recent $230bn rise is almost equal to the market value of the FTSE 100’s current biggest beast. Indeed, the AI computing giant is now worth more than the entire FTSE 100 combined, with over $1trn to spare. Let that sink in.
Due to its ascent, Nvidia has become tech royalty, and rightly so. These days, it’s hard to find a tech-focused fund or investment trust that doesn’t hold it. Not doing so risks underperformance, a bit like leaving Erling Haaland out of your fantasy football team.
The stock is up around 1,600% over five years!
Going all-in
Sticking with the fantasy football theme, imagine if you could have three Erling Haalands in your portfolio. Just think of all those extra juicy points you might get.
In some ways, that is what Manchester & London Investment Trust (LSE: MNL) has done. In its latest June 2025 factsheet, it had a 38.9% weighting to Nvidia. And 26% and 7.1% of net assets in Microsoft and Broadcom, respectively.
That means the trust has nearly three-quarters of its portfolio in just three tech stocks!
This trio are central to the AI revolution. Nvidia still dominates with its powerful GPUs, while Broadcom makes custom chips and networking hardware used in AI data centres. Microsoft owns part of ChatGPT and has rolled out AI features like Copilot to boost productivity.
This extreme concentration has produced tremendous results, though. In the three years to 1 July, Manchester & London Investment Trust’s net asset value surged 131.2%. The period coincides with the release of ChatGPT in November 2022, after which Nvidia’s share price took off like a rocket.
AI era
Of course, this massive concentration also adds risk. If Microsoft, Broadcom and/or Nvidia tank, then the trust would underperform badly.
Explaining this lack of portfolio diversification, lead manager Mark Sheppard wrote in September: “Sadly, we do believe the outstanding winners from the AI era may in time be counted on the fingers of two hands. So what are we meant to do? Diversify to dilute performance? Punish our winners for proving they are elite?”
Another risk here is a sudden slowdown in AI investments and spending by companies. This would be acutely felt by Nvidia, whose lofty price-to-earnings ratio of 55 is based on expectations of robust future growth.
However, the trust doesn’t see this happening. It says the AI era is in its infancy: “AI offers enormous promise and we think this could be one of the most exciting investment and research periods of the century.”
Should I invest?
To be honest, I admire this bold approach, and it has certainly delivered the goods for shareholders over the last three years.
However, I won’t be investing myself because I already own Nvidia shares. Increasing my exposure further would be reckless.
Investors looking at the trust have to be really bullish on Nvidia and the AI age. The shares are trading at a 12.8% discount to net asset value, but this is definitely in the high-risk, high-reward camp.
