NextFin News - In a significant move reflecting shifting institutional sentiment toward the semiconductor sector, EULAV Asset Management has decreased its holdings in NVIDIA Corporation (NVDA). According to a Securities and Exchange Commission (SEC) filing disclosed on February 4, 2026, the investment firm reduced its position in the Santa Clara-based chipmaker during the most recent reporting period. This divestment occurs at a critical juncture for NVIDIA, as the company faces a complex landscape of geopolitical restrictions, intensifying competition in the AI inference market, and a broader rotation out of high-valuation technology stocks.
The reduction by EULAV follows a volatile start to the year for NVIDIA. According to MarketBeat, the filing was processed as part of the standard quarterly disclosure cycle, highlighting a cautious approach by asset managers who have enjoyed massive gains from the AI-driven rally of 2024 and 2025. On February 3, 2026, just a day prior to the disclosure, NVIDIA shares fell more than 2% during a broader market pullback that saw the Nasdaq Composite drop 1.4%. The stock slipped further in after-hours trading to approximately $180.28, as investors weighed the implications of slowing momentum in the enterprise software sector and its potential ripple effects on hardware demand.
The rationale behind such institutional trimming often involves a combination of profit-taking and risk mitigation. For NVIDIA, the "risk" profile has evolved significantly in early 2026. A primary concern is the ongoing "licensing limbo" regarding AI chip sales to China. According to Meyka, while U.S. President Trump’s administration initially signaled a reopening for advanced H200 chip exports in late 2025, actual shipments remain stalled as of February 2026. An inter-agency tug-of-war between the U.S. Commerce Department and the State Department has left billions of dollars in potential revenue in a state of uncertainty. For a firm like EULAV, the lack of clarity on China—historically one of NVIDIA’s largest data-center markets—presents a fundamental headwind that justifies a reduced exposure.
Furthermore, the nature of the AI market itself is undergoing a structural transition. While NVIDIA dominated the "training" phase of large language models, the industry is now pivoting toward "inference"—the real-time application of those models. Reports surfaced in early February 2026 that major customers, including OpenAI, have expressed dissatisfaction with the cost and efficiency of certain NVIDIA chips for inference tasks. According to Reuters, OpenAI has begun exploring alternatives from Advanced Micro Devices (AMD) and specialized startups like Cerebras. Although NVIDIA CEO Jensen Huang has countered these concerns by pledging further investment in OpenAI, the mere prospect of market share erosion in the high-growth inference segment has prompted analysts to question if NVIDIA can maintain its near-monopoly margins.
From a technical perspective, the divestment by EULAV aligns with a broader "priced for perfection" narrative. With NVIDIA’s fourth-quarter and fiscal 2026 financial results scheduled for release on February 25, 2026, many institutional players are choosing to lock in gains rather than gamble on a potential earnings beat that may already be baked into the price. The current market environment, characterized by elevated bond yields and a rotation into defensive sectors, makes high-multiple stocks like NVIDIA particularly vulnerable to even minor guidance disappointments.
Looking ahead, the trajectory of NVIDIA’s stock will likely depend on two factors: the resolution of the U.S.-China licensing stalemate and the company's ability to prove its dominance in the inference hardware space. If the State Department finalizes stricter conditions that effectively bar H200 sales, NVIDIA may be forced to write down inventory, as it did during previous rounds of export controls. Conversely, if Huang can demonstrate that the Blackwell architecture and subsequent iterations offer a definitive ROI for inference, institutional confidence may return. For now, the move by EULAV Asset Management serves as a signal that the "easy money" phase of the AI hardware trade has concluded, replaced by a period of rigorous valuation scrutiny and geopolitical maneuvering.
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