Nvidia is the obvious vulnerability in a portfolio heavy with artificial intelligence stocks, but swapping it for another chipmaker just trades one risk for another.
A smarter hedge, according to Hudson Value Partners founding partner Christopher Davis, is to target companies powered by entirely different economic engines — such as these four distinct plays: Sony Group sells entertainment and game-platform access, Green Brick Partners owns land for homebuilding, The Marzetti Company sells branded food and restaurant sauces, and ESAB supplies industrial fabrication technology.
Each carries its own risks, yet none is hostage to sustained capital spending on AI infrastructure. Shares of the four companies have lagged Nvidia’s performance, which has gained more than fourfold over the past five years: Sony rose 11%, Green Brick Partners rose 136%, ESAB rose 74%, while Marzetti lost 33%.
Here is how Davis, who spoke in an interview on Street Talk with TheStreet’s Caroline Woods, looks beyond AI businesses to diversify portfolios.
Note: The market musings expressed herein are those of the interviewed guest and should not be treated as professional investment advice. Readers should consult a certified financial planner (CFP) for individualized advice based on their available capital, goals, risk tolerance, and time horizon.
Selling Nvidia shares doesn’t automatically reduce AI risk
Nvidia has gained more than 10-fold in the past four years — among the tech companies leading the advance of stocks driven by the market’s interest in AI. Rotating out of Nvidia into peers such as AMD, Intel, Arm Holdings offers only the illusion of diversification — keeping your capital hostage to the AI infrastructure race.
Davis argues that belief in a company shouldn’t override disciplined risk management, urging investors to trim positions that exceed 6% to 7% of their total holdings.
Owning multiple names within AI doesn’t reduce your AI concentration or reduce your thematic risk.
Christopher Davis
Position sizing comes first. A great company can quickly become a liability if it’s overweight in your portfolio — especially when your other holdings swing on the same AI spending cycles, rate shifts, or market mood.
Trimming that exposure is only half the battle. The replacement asset must pass a second test: Does it rely on a genuinely different customer base, revenue stream, and economic rhythm? While the four stocks below are individual ideas rather than an off-the-shelf balanced fund, each clears that hurdle in its own way.
Sony’s case rests on content and PlayStation engagement
Sony’s appeal lies in how its entertainment assets can support multiple businesses simultaneously. A successful film can bring viewers to music, games, and the PlayStation ecosystem, where Sony collects revenue from digital game sales and related services. Sony’s latest results cited higher theatrical revenue from Spider-Man: Brand New Day as a contributor to its Pictures business, while six-month operating income rose 42.9% year over year through September 30.
Sony’s content library is the center of Davis’s investment case. He expects ownership of music, film, and game intellectual property to become more valuable as AI increases the volume of content creation and distribution. The near-term catalyst is Grand Theft Auto VI, which is scheduled for release on November 19, 2026. While Take-Two Interactive owns the popular game series, Davis argues Sony will still benefit from elevated PlayStation engagement and the resulting platform purchases.
Green Brick’s owned land changes the homebuilder equation
Green Brick Partners offers a housing recovery case with an unusually asset-heavy structure. Many builders control future lots through options, which limits upfront capital needs but can also leave more of a land-price increase with the seller. Green Brick reported 40,869 lots owned as of September 30, and its homebuilding gross margin was 29% for the third quarter.
Land ownership is the core of Davis’s thesis because land can account for a large portion of a home’s long-term value. The trade-off is equally clear: Owning land also makes a builder more exposed when demand weakens, home prices stall, or financing costs rise. Buying into Green Brick requires patience amid an uneven housing cycle that may linger until borrowing costs drop and buyers step back in.
Marzetti combines consumer brands with restaurant distribution
Marzetti has a consumer-staples case built around two channels. Its retail business sells dressings, baked goods, and sauces, while its foodservice business supplies restaurant chains and supports licensed products sold in supermarkets. The company’s investor-relations materials list licensing relationships for big fast-food and restaurant chains including Chick-fil-A, Olive Garden, Texas Roadhouse, and other brands.
Marzetti completed its acquisition of Bachan’s, a Japanese barbecue-sauce brand, on May 1, 2026, and Bachan’s adds a second growth lever. Bachan’s contributed $17.8 million of retail sales in the fiscal first quarter ended September 30. Bachan’s retail sales rose 2% in the quarter, while total company sales fell 2.4% — a reminder that the acquisition didn’t remove broader demand and operating risks.
Davis views the sauce business as a growth catalyst that preserves the reliable, defensive demand typical of staple foods. The investment case rests on two catalysts: rolling out Bachan’s across Marzetti’s retail and food-service footprint, and the recovery of the legacy dressing business following a Cyclospora outbreak in the Great Lakes region that caused sales to decline.
ESAB offers an industrial case with acquisition risk
ESAB makes equipment and technologies used to fabricate, inspect, monitor, and control critical industrial products and infrastructure. For investors, it offers an entry point into construction, energy, piping, and manufacturing without taking on direct commodity price risk. Davis prefers that type of supplier role, which generates revenue from customer activity rather than from daily price swings in raw materials such as oil and gas.
ESAB completed the acquisition of Eddyfi in June, which provides non-destructive testing (NDT) inspection technologies, sensors, software, and robotic solutions, for $1.45 billion, and Eddyfi is seen as expanding ESAB’s inspection and monitoring capabilities. ESAB reported in its third-quarter filing that the acquired business added $84.3 million of sales over the first nine months of 2026. That accounted for 3.5% of ESAB’s net sales of $2.377 billion.
The acquisition moved the company beyond basic fabrication tools and into full life-cycle inspection and monitoring services. Davis ranked ESAB as his top pick of the four, pointing to potential Middle East reconstruction tailwinds if regional conflict continues to de-escalate. While that catalyst is far from guaranteed, the near-term test is whether management can smoothly integrate Eddyfi and convert its wider product lineup into steady, long-term growth.
Investors should diversify by business driver, not by ticker count
Rather than guessing Nvidia’s next move, investors with an oversized position in the tech giant should set clear allocation limits on both the individual holding and the broader AI theme. Trimming that stake only reduces risk if the new capital flows into fundamentally different economic engines: Sony taps into consumer media and gaming, Green Brick introduces housing and residential land, Marzetti adds consumer food and restaurant distribution, and ESAB delivers industrial manufacturing and infrastructure testing.
The next test is company-specific. Sony investors should monitor the November 19 launch of Grand Theft Auto VI and whether greater PlayStation engagement follows. Green Brick investors should watch orders, margins, and land ownership. Marzetti investors should track the pace of Bachan’s integration and retail sales. ESAB investors should watch Eddyfi integration and demand for its broader industrial offering. A different ticker is not diversification by itself — a different business cycle can be.
Sources
Christopher Davis on TheStreet · watch the full segment
Cited segments:
- Owning multiple AI names does not reduce AI concentration or thematic risk. (10:45–12:07)
- Sony can benefit from a content and PlayStation flywheel, including Grand Theft Auto VI engagement. (13:09–15:23)
- Green Brick’s owned lots distinguish its land-rich homebuilding model. (15:29–17:03)
- Bachan’s can support The Marzetti Company’s earnings recovery. (17:17–19:17)
- ESAB’s Eddyfi acquisition broadens its fabrication and inspection capabilities. (19:18–20:48)
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