Self-Made Billionaire Karthik Sarma Sold His Entire Stake in Nvidia and Bought This Incredible Stock Up More Than 100% in 12 Months

Core Insights - Karthik Sarma, a prominent investor and former Tiger Cub, has shifted his investment focus from Nvidia to Tapestry, a luxury handbag company, indicating a strategic pivot away from AI-related stocks [2][10]. Investment Strategy - Sarma typically holds positions for the long term but recently sold his Nvidia shares after holding them for less than two years, capitalizing on significant price appreciation [3][5]. - The decision to sell Nvidia was influenced by its rising valuation, with the forward P/E ratio exceeding 40, prompting Sarma to take profits [6][8]. Company Performance - Nvidia remains a leading player in the GPU market, but competition may impact its market share in the coming years [7]. - Tapestry, which owns brands like Coach and Kate Spade, has seen Coach account for nearly 80% of its sales, with expectations for improved profitability through strategic management of its brands [11][12]. Financial Metrics - Tapestry's management anticipates free cash flow of $1.3 billion for the current year, an increase from $1.1 billion the previous year, supporting share repurchase initiatives [13]. - Tapestry's stock trades at a forward P/E of 18, significantly lower than Nvidia's 38, although it represents the highest valuation for Tapestry in years [14].