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Below, I've outlined why D.E. Shaw's recent sale of Nvidia and purchase of another chip stock, Broadcom (NASDAQ: AVGO), may look like a savvy move in the long run. Last quarter D. E. Shaw sold 12.1 million shares of Nvidia, reducing its position by about 51% in the process.

The artificial intelligence trend has supercharged the growth of many tech stocks over the past year, including semiconductor giants Nvidia (NASDAQ: NVDA) and Arm Holdings (NASDAQ: ARM). So far in 2024, Nvidia shares climbed 144%, and Arm stock rose 91%.