Key Takeaways
- • Nishant Kumar, Bloomberg News chief correspondent for hedge funds, said he has never seen a day like the prior week in his 16 years covering the industry, with equity, macro, credit and stock-picking funds all losing money together.
- • Nvidia (NASDAQ:NVDA) fell 22.6% over the past month to $177.51 in premarket trading on November 11, a 5.1% bounce from the November 10 close of $168.89.
- • Millennium was down 2.3% in October, while the AI-focused fund Vara lost 33% that month yet remained up for the year, according to Kumar.
- • Michael Ball, Bloomberg macro strategist, attributed the bounce to a squeeze of short sellers and put covering, describing it as a mechanical move rather than an AI narrative shift.
- • Nvidia's Q2 fiscal 2027 revenue was $96.221 billion, up 105.8% year over year, with Q3 guidance of $108.0 billion plus or minus 2%; the company reports earnings on November 17.
Summary
Bloomberg News chief hedge fund correspondent Nishant Kumar, who has covered the industry for 16 years, said on Bloomberg's Odd Lots podcast that he had never seen a day like the prior week. Equity, macro, credit and stock-picking funds all lost money together, which he described as a "perfect storm" in which "everyone failed together." Nvidia sat at the center of the losses. The stock had fallen 22.6% over the past month to $177.51 in premarket trading on November 11, after closing at $168.89 on November 10.
Kumar said multi-strategy funds, which are typically valued for steady returns during downturns, also lost money. Millennium was down 2.3% in October and held 12,157,614 Nvidia shares at midyear. Funds concentrated in AI took much larger hits; the AI-focused fund Vara lost 33% in October but was still up for the year, illustrating how much the AI trade had earned before reversing.
Macro strategist Michael Ball of Bloomberg News called the Thursday open after the election "a sucker punch," arguing that the rebound was "the pain trade of everyone getting squeezed out of shorts and covering puts." Short covering and dealer hedging can amplify price moves. On November 10, Nvidia options expiring the next day traded 995,528 calls against 827,407 puts.
The bear case centers on governance and capital spending. Jim Cramer, speaking on Mad Money on November 10 and cited by 24/7 Wall St., said Jensen Huang had admitted to a liaison with a woman described as an alleged Chinese spy; Huang remained CEO with the board's support as of those remarks. Ball also pointed to an October shift in the capex narrative toward financing, free cash flow and power constraints, with post-election concerns about the 2028 project pipeline adding pressure.
Nvidia's most recent filing, for Q2 fiscal 2027, reported revenue of $96.221 billion, up 105.8% year over year, and Data Center revenue of $89.023 billion, up 117%. Supply obligations reached $279 billion. The stock trades at about 23 times trailing earnings. Ball said compute demand growth remains the key metric and that demand stays on a strong S-curve. Nvidia's November 17 report will show whether guidance still points to demand exceeding supply.
Kumar said multi-strategy funds, which are typically valued for steady returns during downturns, also lost money. Millennium was down 2.3% in October and held 12,157,614 Nvidia shares at midyear. Funds concentrated in AI took much larger hits; the AI-focused fund Vara lost 33% in October but was still up for the year, illustrating how much the AI trade had earned before reversing.
Macro strategist Michael Ball of Bloomberg News called the Thursday open after the election "a sucker punch," arguing that the rebound was "the pain trade of everyone getting squeezed out of shorts and covering puts." Short covering and dealer hedging can amplify price moves. On November 10, Nvidia options expiring the next day traded 995,528 calls against 827,407 puts.
The bear case centers on governance and capital spending. Jim Cramer, speaking on Mad Money on November 10 and cited by 24/7 Wall St., said Jensen Huang had admitted to a liaison with a woman described as an alleged Chinese spy; Huang remained CEO with the board's support as of those remarks. Ball also pointed to an October shift in the capex narrative toward financing, free cash flow and power constraints, with post-election concerns about the 2028 project pipeline adding pressure.
Nvidia's most recent filing, for Q2 fiscal 2027, reported revenue of $96.221 billion, up 105.8% year over year, and Data Center revenue of $89.023 billion, up 117%. Supply obligations reached $279 billion. The stock trades at about 23 times trailing earnings. Ball said compute demand growth remains the key metric and that demand stays on a strong S-curve. Nvidia's November 17 report will show whether guidance still points to demand exceeding supply.
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