Here's Why This Famed Value Investor Cashed Out His Nvidia Stock: 'I Couldn't Take The Rise'

Nvidia Corp.'s NVDA strong run-up this year has polarized investors and analysts alike. While some lament its stretched valuation, others still see value in the stock, given the massive opportunity artificial intelligence presents.

One famed investor recently offloaded his Nvidia holdings.

What Happened: New York University Stern School of Business Finance Professor Aswath Damodaran, widely considered an authority on asset valuation, revealed to CNBC that he sold his stake in Nvidia.

“The run-up has been just so astonishing that I cannot in good conscience hold on to it and call myself as a value investor,” the professor said.

Damodaran, who has been nicknamed the “Dean of Valuation,” echoed a similar sentiment in an interview with Barron's earlier in the week. He told the publication that he had invested in Nvidia since 2017 and has sold the stock since its meteoric rise.

“That was in my portfolio till this morning,” Damodaran told Barron’s on Tuesday.

“And I finally got it out of my portfolio because I couldn't take the rise. You had $300 billion in a week. You're pushing the absolute limit of what sustainable value is,” he said.

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Nvidia Vs. Other Trillion-Dollar Names: While Nvidia is essentially a hardware company, other members of the trillion-dollar club have used software to draw in large numbers of users into their ecosystems, the New York University professor told Barron's. Nvidia crossed the trillion-dollar valuation this week before its market cap dropped below the mark.

"The upside [for Nvidia] is not as large as it could potentially be for a consumer-based company with an ecosystem of billions of users. And that kind of crimps how much you're willing to bet on that optionality," Damodaran said.

Nvidia closed Friday's session down 1.11% at $393.27, according to Benzinga Pro data. The stock has added about 170% this year.

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