Nvidia Corp. NVDA stock has been a high-flier ever since the artificial intelligence revolution took root in early 2023 with the popularity of OpenAI’s ChatGPT chatbot. Stanley Druckenmiller, the chairman and CEO of Duquesne Family Office, on Wednesday lamented his decision to cash out of the AI stalwart’s stock.
What Happened: “I've made so many mistakes in my investment career — one of them was I sold all my Nvidia probably somewhere between $800 and $950. I think it’s 1300 on that stock,” said Druckenmiller in an interview with Bloomberg. Apparently, the former hedge fund manager was referring to the price that prevailed ahead of the 10-for-1 stock split, which took effect this June.
The billionaire investor and former hedge fund manager said he does not own any Nvidia stock now. “It was a big mistake.”
The latest 13-F filing by the billionaire’s home office showed it held 214,060 Nvidia shares at the end of the second quarter.
Explaining the reasoning as to what drove him to sell the stock, the billionaire investor said about 18 months ago when the stock was a little over $300, he expected to own it for years. “What changed is it tripled in a year and I, I thought the valuation was rich,” he said.
That said, Druckenmiller said he is a big-term believer in AI. “There’s still many ways to play AI, particularly the infrastructure that has been built out to support the power needed,” he said. He also expressed desire to get back into Nvidia. “Yes, I think Nvidia is really a wonderful company and were the price to come down, we get involved again,” he said.
“But right now I’m licking my wounds from a bad sale there,” he added.
See Also: How To Buy Nvidia (NVDA) Stock
Why It’s Important: Nvidia shares have been on a tear since early 2023, and on top of the 240% rally in 2023, the stock has gained an incremental 174% year-to-date. The protracted rally marks a turnaround from 2022 when the stock fell over 50%, as the rising AI tide lifted all boats levered to AI technology.
Nvidia's first-mover advantage, cutting-edge technology, full-stack AI solutions, and a strong management team have been hallmarks of the company's success.
Skeptics often have a red wave of heavy spending needed to keep the lead in the AI race and potential AI bubbles burst as headwinds. The company has defied the doomsday predictions as it continues to execute on plans and outperforms relative to expectations.
In the near-term, the stock could see an upward bounce going into its third-quarter earnings, which typically is scheduled for late November, with price target re-ratings by Wall Street potentially providing a boost.
Price Action: Nvidia’s shares ended Wednesday’s session up 3.13% at $135.72, according to Benzinga Pro data. Year-to-date, the Nvidia stock is up 181.8%.
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