Nvidia Is Still Undervalued, Says $50 Billion Manager Impax

(Bloomberg) — As Nvidia Corp. (NVDA) found itself the target of a deep selloff earlier this year, Impax Asset Management was quietly seizing the moment to build a stake it had long regretted not owning.

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Ian Simm, chief executive officer and founder of the $50 billion London-based asset manager, says he and his team had been looking for an opportunity to correct what they had come to realize was a wrong call a few years ago, which meant missing out on Nvidia’s stunning 800% rally since the beginning of 2023.

“We just underestimated the market potential of their product,” Simm said in an interview. Impax had been looking for a way in, but Nvidia “was expensive.” That is, “until it had a selloff.”

Nvidia’s share-price slump earlier this year resulted in a peak-to-trough decline in its market value of close to $1 trillion. Though much of that has since been recouped, Simm says he thinks the company’s current valuation of more than $3.2 trillion understates what it’s really worth.

Established in 1998, Impax has made a name for itself as a giant among asset managers focused on the transition to a more sustainable economy. Simm says that goal should be compatible with making money for his clients. But it’s been a tough sell of late.

Over the past couple of years, a spike in interest rates, an energy crisis and the ascent of the so-called Magnificent Seven of technology behemoths have turned green investing into a losing bet. Impax’s own share price is down almost 30% this year, while the S&P Global Clean Energy Index has lost more than 10%. The S&P 500, meanwhile, is up more than 20% in the same period.

Earlier this week, Impax reported results that showed gains in listed equities of £5.3 billion ($6.9 billion) for the fiscal year ended Sept. 30. Still, that was less than the £5.8 billion of net outflows that Impax suffered in the period.

Simm says Impax is learning from the past few years and focusing more on Big Tech, as it looks for undervalued opportunities to generate bigger returns.

“Frankly, we’ve underperformed for the last couple of years in our main strategies because we’ve been more growth-at-a-reasonable-price, staying away from the momentum and hype around mega-cap tech investing,” he said.