Billionaires are making moves, and when they start shifting their portfolios, the rest of us tend to pay attention. Lately, there’s been a noticeable trend among some of the wealthiest investors selling off shares of NVIDIA (NASDAQ:NVDA). They are turning their attention to a lesser-known but fast-growing Canadian company: Topicus.com (TSXV:TOI). It’s an interesting shift, especially considering NVIDIA’s dominance in artificial intelligence (AI) and semiconductors. But as valuations soar and opportunities emerge elsewhere, big money is flowing north of the border.
What happened?
NVIDIA has been an absolute powerhouse in recent years. The company’s most recent earnings report showed a staggering US$35.1 billion in revenue. Up 17% from the previous quarter and an incredible 94% increase from the same period last year. Its data centre business, which supplies high-performance chips for AI development, was the star of the show, bringing in over $30.8 billion. A whopping 112% year-over-year growth. These numbers are almost hard to believe, and that’s part of the problem. Some investors, including high-profile billionaires, are starting to wonder if the stock can continue its meteoric rise or if it’s already priced for perfection.
The concern isn’t about NVIDIA’s business itself. The company remains a leader in AI and continues to push the boundaries of what’s possible with computing power. But at a market cap of over US$3 trillion and a trailing price-to-earnings (P/E) ratio hovering around 50, some big investors are questioning how much further it can go in the near term. With valuations stretched, some are cashing in profits and looking for the next great opportunity. And that’s where Topicus.com comes in.
Enter Topicus
Topicus.com isn’t a household name like NVIDIA, but it has been steadily making a name for itself in the world of software acquisitions. Spun off from Constellation Software, Topicus follows a similar playbook: acquiring niche software businesses, integrating them efficiently, and compounding growth over time. In its latest earnings report, the TSX stock reported revenue of €312.2 million, marking a 12% year-over-year increase. Net income jumped to €38.0 million, up from €28.3 million a year prior. These aren’t NVIDIA-sized numbers, but they reflect a steady, reliable growth story.
Investors seem to be taking notice. Over the past year, Topicus’s market cap has expanded significantly, reaching nearly $12 billion, up from around $7 billion a year ago. Its forward P/E ratio, while high at around 55, is still significantly lower than NVIDIA’s valuation on a growth-adjusted basis. While NVIDIA is benefiting from an AI-driven boom, Topicus represents a more methodical, acquisition-driven strategy that has historically rewarded patient investors. Billionaires looking for high returns without the extreme volatility of AI stocks may find it an appealing alternative.
Eyeing up risk
Another key factor in this shift is the diversification of risk. AI stocks like NVIDIA have been surging on optimism. However, these are also heavily exposed to potential downturns in the sector. Supply chain issues, regulatory scrutiny, and competition from emerging players could impact future earnings. NVIDIA’s upcoming Blackwell AI chips are expected to drive further growth. Still, there’s always the risk that supply constraints could limit how much revenue the company can actually generate from them in the short term.
Topicus, for its part, continues to quietly expand. The TSX stock’s approach to growth relies less on macroeconomic factors and more on its ability to find and acquire high-quality software businesses. This model has worked exceptionally well for its parent company, Constellation Software, which has delivered enormous long-term returns to investors. While Topicus is still in a relatively early stage compared to its parent, it’s following the same path, and some investors believe it could be the next great Canadian tech success story.
Bottom line
While NVIDIA remains a juggernaut, the money flow tells an interesting story. As valuations climb ever higher, billionaires aren’t necessarily turning their backs on AI, but they are looking for opportunities with a bit more room to run. Topicus is emerging as one of those opportunities, quietly attracting smart money from some of the savviest investors in the world. Whether this trend continues or reverses remains to be seen, but one thing is clear: there’s always another great investment hiding in plain sight, waiting for those with the patience and foresight to see it.
