Company Interview / Loftus Peak's Pollack on US exceptionalism, and why he still likes Nvidia

Key Points:

AI sector valuations remain below historic bubble levelsHoldings include Nvidia, Meta, Broadcom, Arista, Marvell, AMD, CATL and Microsoft, but not TeslaTesla described as overvalued compared to Chinese competitorsPositive outlook on AI demand and global equity markets due to falling interest rates

Alex Pollak, CIO of Loftus Peak states that current valuations in the AI sector are not indicative of a bubble. Pollak points to forward price-earnings multiples ranging from 20 to 35 for core holdings such as Nvidia ($NVDA), Broadcom ($AVGO), Arista ($ANET), Meta ($META), and Microsoft ($MSFT), which he considers not "bubble" territory. He emphasises that true bubbles tend to involve companies trading at extreme multiples of 150 to 350, well above current levels, so Pollak remains comfortable staying invested.

Pollak highlights Nvidia's sustained competitive advantage, crediting Loftus Peak's early investment in the company back in 2016 to its focus on artificial intelligence and machine learning. He expects Nvidia’s growth outlook to remain strong in the near term. Pollak also confirms holdings in Meta, Marvell ($MRVL), AMD ($AMD), Broadcom, and Arista, but strongly criticises Tesla ($TSLA) as overvalued, describing its 200-times PE ratio as a sign of a bubble. In contrast, Loftus Peak has selectively returned to China, investing in the world’s largest battery company, CATL, citing its dominance in both electric vehicle batteries and energy storage solutions.

Looking ahead, Pollak expresses interest in upcoming results from Taiwan Semiconductor ($TSMC), Meta, and Google ($GOOGL), expecting robust AI demand to continue. He remains broadly positive on the outlook, anticipating further rate cuts and ongoing investment in AI.