What Delta is doing with this Wall Street darling stock

Over the past week or so, one specific equity in Delta's managed equity portfolios has experienced a powerful upward movement. It has been so significant that in many cases, it has become the portfolio’s largest holding. 

This security, NVIDIA, has become the darling of every analyst on Wall Street—and that is exactly what concerns me.

NVIDIA (NASDAQ ticker: NVDA) is a leader in artificial intelligence. We believe AI tech will be transformational and should be part of our clients’ portfolios.

But what goes up…

While we could rest on our laurels for having bought this stock over 18 months ago, I have too much experience not to realize that what goes up will come down.

And that is why I put a stop loss order in on the same security that has brought so much value to all of our portfolios. 

What is a stop loss order?

A stop loss order is a standing order to sell a security at a specified price—i.e. if a stock hits X, we sell.

Now that we have captured this increase in value for our clients, we want to maintain it. 

While I am willing to tolerate some volatility in this stock, a lot is going on in the world that could cause a large-scale price disruption. Be it the Middle East, China-Taiwan, a new AI development, or even an innovative chip competitor—these are all potential value killers that could trigger significant market upheaval in this security. 

For these reasons alone, a stop loss order makes sense. 

Preserving value

If NVIDIA keeps growing in value, then great, all our portfolios will grow as well. But if it backs up, most of our realized gains will be preserved. 

At Delta, we take action to protect the value of our clients' portfolios and explain why we do what we do.