Dan Chung: 25 years after rebuilding Alger post-9/11, Nvidia is 14% of his top fund

At a Glance

Fred Alger Management's flagship Alger Spectra Fund (SPECX), which manages $4.5 billion in total assets, ranked in the top 4% of its category last year and the top 2% in 2024, according to CNBC's reporting. Nvidia is the fund's largest position at 14% of assets as of June, per Morningstar data cited by CNBC, with the stock up 17% this year. CEO and chief investment officer Dan Chung, 64, has run the firm since taking over in the immediate aftermath of the Sept. 11, 2001 attack, which killed 35 Alger colleagues, including then-CEO David Alger, when the firm's 93rd-floor offices in One World Trade Center were hit at 8:46 a.m.

Why It Matters Now

A top-2% category ranking in 2024 is the data point that matters here, and it's worth asking what it's actually pricing. It isn't simply "Alger owns Nvidia" — plenty of growth funds do. It's that Nvidia's 17% gain this year, coming after the stock's much larger run since late 2022, is still enough to anchor a fund at the top of its peer group, which tells you the market hasn't fully rotated away from AI infrastructure leadership even as the easiest gains in the group are behind it. Chung's own framing, that the sector is closer to "1995... than, say, 1999," according to CNBC, is a call about where in the cycle capital markets currently sit — not a call about any single quarter's print.

That framing matters for how investors read the fund's other top-10 holding, Nebius Group, which CNBC reports has nearly tripled this year. A neocloud name tripling while the fund's mega-cap AI position gains a comparatively modest 17% suggests the market is still pricing in a buildout phase — more compute capacity, more specialized infrastructure providers — rather than a mature, slower-growing one. Whether that gap closes by Nvidia re-rating higher or by smaller AI infrastructure names cooling off is the open question the fund's positioning is effectively betting on.

The other current running through the story is philosophical, not just sectoral. Alger's founder built the firm on "positive dynamic change" and buying accelerating growth over cheap valuation — reflected in the quote attributed to Fred Alger, "You can go broke buying cheap stocks," per CNBC. That approach, dating to Alger's purchases of Intel in 1977, Apple in 1984 and its Microsoft position by 1990, is the same lens now applied to Nvidia, CrowdStrike, Western Digital, Micron and Nebius. The fund's recent category rankings suggest that growth-over-value discipline is still being rewarded by the market, at least through 2024's results.

Key Debates

• Concentration versus conviction: A single position at 14% of fund assets means Spectra's near-term performance is unusually tied to one stock's multiple holding up.
• Early cycle or late cycle: Chung's "1995, not 1999" comparison, per CNBC, implies more runway before any AI-led market excess resembles the dot-com peak — a view the market has not uniformly settled on.
• Mega-cap versus niche infrastructure: Nvidia's 17% gain this year versus Nebius nearly tripling raises the question of whether smaller AI infrastructure plays are pricing in more risk-adjusted upside, or simply more risk.
• Track record versus recency: SPECX's top-2% 2024 ranking and top-4% prior-year ranking are strong recent data points, but the article does not provide the fund's return history beyond those two years for longer-cycle context.

Related Stocks & Sectors

• Nvidia (NVDA): Spectra's largest holding at 14% of assets as of June, per Morningstar; the stock's 17% year-to-date gain is the single biggest swing factor in the fund's concentrated growth positioning.
• CrowdStrike (CRWD): Chung identifies it as a high-conviction holding he expects to sustain "very high rates of growth," per CNBC, tying cybersecurity demand directly to the broader buildout of AI systems that need securing.
• Western Digital (WDC) and Micron (MU): Both are chipmakers Chung expects to keep benefiting from AI-driven memory demand, according to CNBC — a read-through for the storage and memory segment of the semiconductor supply chain.
• Nebius Group (NBIS): A top-10 Spectra holding CNBC describes as a "neocloud" company that Chung identified early; its shares have nearly tripled this year, the fund's most dramatic single-name move cited in the piece.

What to Watch

• Morningstar's next category-ranking update for the Alger Spectra Fund, to see whether its top-2%/top-4% run extends or reverts.
• Whether Nvidia's weighting inside Spectra moves materially above or below the 14% June level as its share price and fund flows shift.
• Continued price action in Nebius Group, given how much of the fund's recent narrative rests on a name that has nearly tripled this year.
• Any updates to the Alger 35 ETF, the 35-holding vehicle the firm launched in memory of its Sept. 11 losses, as a signal of where Alger's "highest-conviction" ideas are shifting.

Overall Outlook

The bull case, as Chung lays it out to CNBC, is straightforward: the AI investment cycle is still in its early-to-middle innings, computing power remains scarce rather than oversupplied, and a growth-focused stock-picking approach that has produced a top-2% category ranking in 2024 has earned the benefit of the doubt for now. The counterweight is concentration risk — 14% of one fund's assets in a single name, plus a top-10 position that has nearly tripled in a year, is a portfolio built for continued AI infrastructure demand, not for a scenario where growth decelerates or multiples compress. Nothing in the reporting quantifies Alger's current total assets beyond "more than $47 billion," so the precision of that growth trajectory, and how much of it is inflows versus appreciation, isn't fully resolved by the available figures.

FAQ

What is Fred Alger Management's Alger Spectra Fund?

The Alger Spectra Fund (ticker SPECX) is Fred Alger Management's flagship mutual fund, holding $4.5 billion in total assets. It ranked in the top 4% of funds in its category last year and the top 2% in 2024, according to CNBC's reporting.

Why is Nvidia the top holding in Dan Chung's fund?

Nvidia represented 14% of the Spectra fund's assets as of June, per Morningstar data cited by CNBC, making it the fund's single largest position. Chung has said the firm still sees AI-driven growth continuing for years, comparing the current market environment to 1995 rather than the 1999 dot-com peak.

How did Dan Chung end up leading Fred Alger Management?

Chung was named chief investment officer in the immediate aftermath of the Sept. 11, 2001 attack, which killed 35 of the firm's colleagues, including then-CEO David Alger, at its 93rd-floor offices in the World Trade Center's North Tower. Firm founder Fred Alger, Chung's father-in-law, came out of retirement to task him with rebuilding the company, according to CNBC.

This article was independently written by OneDayTrading from public reporting. Read the original (CNBC)