Fidelity Portfolio Manager Steve Wymer is looking beyond exuberance for new applications powered by generative artificial intelligence to the investment appeal of firms that make the essential components and provide the critical backbone of ChatGPT and other AI-powered large language models.
“I am bullish on companies behind the high-performance computing and technology that powers the new and growing generative AI workload, such as chipmakers, providers of cloud-computing services, and select software providers,” says Wymer, who manages Fidelity® Growth Company Fund (FDGRX).
In helming the fund since 1997, he has put up impressive performance versus the benchmark Russell 3000® Growth Index by favoring companies offering either a growth-enhancing product or service, or an internal catalyst.
In assessing the still-evolving AI ecosystem, Wymer says that he sees plenty of companies that align with his preference for businesses operating in well-positioned industries and niches that he believes can deliver persistent sales and earnings growth.
He cites Nvidia (NVDA) as an AI-infrastructure play that he expects to continue to capitalize on booming interest in language-generating AI.
“The chipmaker is widely viewed as a key beneficiary of the ongoing AI buildout that has accelerated as businesses seek to offer generative AI services,” Wymer explains, noting Nvidia’s dominance of the market for advanced graphics chips that are the lifeblood of generative AI systems, including the viral chatbot ChatGPT.
Nvidia management said it has expanded production to meet demand that has come “literally from every corner of the world” as companies “race to incorporate generative AI into every product, service, and business process.” Nvidia was the fund’s top holding, at roughly 14% of assets, and largest overweight as of November 30.
Generative AI also has shown customers that many other applications in their data centers can be accelerated with Nvidia hardware and software in a full-stack approach. This leads to freeing up space, capacity, and power for their customers, according to Wymer.
He also cited Advanced Micro Devices (AMD) as another semiconductor holding driven by AI-related catalysts. The stock rose following the firm’s May announcement that it has been working with software & services giant Microsoft (MSFT)—a sizable fund holding and another play on Wymer’s AI-infrastructure theme—as it relates to AI technology workloads.
Additionally, Wymer mentions that, in December, AMD launched its newest chip for large and cutting-edge AI models, the MI300X. This chip, which AMD called “the world’s most advanced accelerator for generative AI,” is expected to start shipping in significant quantities this year and will compete with Nvidia’s offerings, he says.
The fund’s position in Microsoft partly reflects the view that silicon alone will not win the race for AI supremacy. Wymer values the software/cloud computing giant’s embrace of generative AI, including the billions of dollars it has invested in OpenAI, the company behind ChatGPT, as well as Microsoft’s deployment of the technology across its products.
For specific fund information, including full holdings, please click on the fund trading symbol above.
Steve Wymer is a portfolio manager in the Equity division at Fidelity Investments.
In this role, he manages Fidelity Growth Company Fund (since 1997), Fidelity Series Growth Company Fund (since 2013), Growth Company Pool (since 2013), and Growth Company K6 Fund (since 2019).
Prior to assuming his current responsibilities in 1997, Mr. Wymer held various other roles at Fidelity, including that of portfolio manager of Fidelity Dividend Growth Fund from 1995 to 1997, portfolio assistant on Fidelity OTC Portfolio from 1994 to 1995, portfolio manager of Select Chemicals Portfolio from 1993 to 1995, portfolio assistant on Fidelity Magellan Fund from 1992 to 1994, portfolio manager/portfolio assistant on Select Automotive Portfolio and Fidelity Growth and Income Fund from 1990 to 1992, and equity research analyst from 1989 to 1990.
Before joining Fidelity in 1989, Mr. Wymer worked as a small business consultant at Deloitte Haskins & Sells from 1985 to 1987. He has been in the financial services industry since 1989.
Mr. Wymer earned his bachelor of science degree in accounting from the University of Illinois and his master of business administration degree from the University of Chicago.