Billionaire Investor Stanley Druckenmiller Regrets Early Sale of Nvidia Stock Amid AI Boom

You're Not Going to Believe What This Billionaire Investor Just Said About Nvidia | The Motley Fool

There's no question that Nvidia (NVDA 0.89%) has been the biggest winner in the artificial intelligence (AI) boom. The AI chip stock added a whopping $3 trillion in market cap since the beginning of 2023, shortly after ChatGPT was launched. However, throughout the first half of the year, there was a surprising rotation out of Nvidia stock. A number of billionaire investors who had capitalized on the stock's initial gains sold the AI stock, arguing that there were better opportunities elsewhere. Among those investors were David Tepper of Appaloosa Management, Israel Englander of Millennium Management, Ken Griffin of Citadel Advisors, George Soros of Soros Capital Management, and Stanley Druckenmiller, who ran Duquesne Capital Management for more than two decades. Druckenmiller, who occasionally discusses his stock moves in interviews, was early to jump on the AI trend in Nvidia. The investor, whose hedge fund delivered annual average returns of 30% when it was active, first bought shares of Nvidia in the fourth quarter of 2022, recognizing that the launch of ChatGPT would lead to demand for Nvidia's GPUs, which were used for AI applications. However, even Druckenmiller seemed surprised by Nvidia's dramatic surge through 2023 and 2024, and since sold out of the high-flying stock. Back in May, he acknowledged cutting his Nivida position, saying, "A lot of what we recognized has become recognized by the marketplace now." In other words, he believed that the upside potential in the stock was limited in late March when he sold it. More than six months after that sale, Druckenmiller now has some regrets. In an interview with Bloomberg, the billionaire said the decision to sell Nvidia was a "big mistake." He said he sold most of his position when Nvidia was priced between $80 and $95 (post-split) and the stock has now run up past $130, meaning the value of Nvidia has increased roughly 50% since he did most of his selling. In 2023, Druckenmiller said he expected to own the stock for years, but he thought the "valuation was rich" after the stock tripled in just a year. At one point, Nvidia was his biggest holding. At the end of Q2 2023, he had 9.5 million (post-split) shares of the stock worth roughly $400 million. He sold 754,000 in third quarter of 2023, 2.57 million in Q4 of that year, 4.42 million in the first quarter of 2024, and 1.54 million in the next quarter. He's since sold his remaining 214,060 shares of Nvidia, according to the Bloomberg interview. It's difficult to know precisely when the Duquesne boss sold those shares, but using the end-of-the-quarter Nvidia share price from each of its sales, Druckenmiller left roughly $500 million on the table with Nvidia stock. In addition to calling the Nvidia sale a mistake, Druckenmiller also remained bullish on the long-term future of AI, saying, "We are long-term believers in AI, and there are still many ways we're playing AI." He also added, "And yes, I think Nvidia's a wonderful company, and were the price to come down we'd get involved again, but right now I'm licking my wounds from a bad sale there." Nvidia stock might be expensive at a price-to-earnings ratio of 65, but the business has certainly demonstrated it deserves to trade at a premium. It's still delivering monster sales growth with revenue more than doubling for five quarters in a row, and demand for its Blackwell platform has been "insane," according to CEO Jensen Huang. The new hardware is already sold for the next 12 months after it was just released. Druckenmiller may not get another opportunity to buy Nvidia at a price that makes sense for him, but Nvidia investors should take comfort in knowing that one of the most influential investors in the market now admits he was wrong to underestimate the company. With the Blackwell platform off to a roaring start, the future for Nvidia still looks as bright as ever.

Billionaire investor is licking his wounds after selling Nvidia

Famed hedge fund manager and Duquesne Family Office founder Stanley Druckenmiller admits he isn't Berkshire Hathaway's Oracle of Omaha Warren Buffett. The billionaire investor, who hasn't lost in a single quarter throughout his 30-year career, said he made a "big mistake" selling Nvidia too early after initially thinking he was going to hold it for years. Druckenmiller spoke this week to Bloomberg's Sonali Basak. "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 somewhere around $1300 [per share] on that stock now," said Druckenmiller on Wednesday. Nvidia's stock is trading at about $139.59 today, after undergoing a 10-for-1 stock split effective in June 2024 that made it more accessible to a broader range of investors, particularly those with smaller accounts. Duquesne built an impressive stake in the AI darling with a market on the most-coveted graphics processing units. In 2022 Duquesne owned about $400 million in Nvidia stock, making it the office's top holding. He began shaving it off in 2023. By August 2024, Druckenmiller had fully exited his position in Nvidia's stock. "I own none today, "Druckenmiller confirmed to Bloomberg. "It was a big mistake." He initially expected to hold the stock for years, but then the value tripled in a year and he thought the valuation was "rich." Nvidia's stock then skyrocketed in 2024, driven by soaring demand for its AI chips. Billionaire Oracle cofounder and chief technology officer Larry Ellison recently admitted that he treated Nvidia CEO Jensen Huang to dinner at Nobu, along with Elon Musk, to beg Huang to give them more GPUs. "I would describe the dinner as Oracle -- me and Elon begging Jensen for GPUs," Ellison recalled. "Please take our money. Please take our money. By the way, I got dinner. No, no, take more of it. We need you to take more of our money please." Druckenmiller said he still has designs on AI, and it's never say never on buying Nvidia in the future. "Were the price to come down, we'd get involved again," added Druckenmiller. "But right now, I'm licking my wounds from a bad sale there."

Stanley Druckenmiller says he's 'licking my wounds' from selling Nvidia too soon

Billionaire investor Stanley Druckenmiller said on Wednesday that his decision to sell out of Nvidia this year was a "big mistake." "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," Druckenmiller said in an interview on Bloomberg. "I own none and I owned none the last 400 points." Druckenmiller's comments don't reflect Nvidia's 10-for-1 stock split, which went into effect in June. The stock closed Wednesday at $135.72. On a split-adjusted basis, his sales would have taken place at between $80 and $95. Nvidia has been the primary beneficiary of the artificial intelligence boom, selling its graphics processing units (GPUs) to top cloud companies and the biggest developers of large language models. The stock soared 239% last year and is up another 174% in 2024, closing at a fresh record on Monday. Earlier this year, Druckenmiller revealed on CNBC's "Squawk Box" that he cut his Duquesne Family Office's position in Nvidia in late March, saying that "we've had a hell of a run." Taking the split into account, Duquesne owned about 6.18 million shares at the start of the year, 1.76 million at the end of the first quarter and 214,000 when the second quarter closed. In the third quarter of last year, Nvidia was his top holding. At the time he owned 8.75 million shares worth around $400 million. If he held onto that entire stake, it would currently be worth about $1.19 billion. Duquesne hasn't released its third-quarter holdings yet. "It tripled in a year, and I thought the valuation was rich," Druckenmiller told Bloomberg. "Nvidia is a wonderful company and were the price to come down, we'd get involved again. But right now I'm licking my wounds from a bad sale." Nvidia is expected to release quarterly results in November, but most of its top customers, including Meta, Microsoft, Amazon and Alphabet, will report financials later this month. Druckenmiller told CNBC in May that Nvidia was "a little overhyped now, but underhyped long term." He added that he was introduced to Nvidia in 2022, when "I didn't even know how to spell it."

Amid Nvidia's Stratospheric Rally, Billionaire Investor Druckenmiller Regrets Cashing Out Of AI Stalwart's Stock: 'I'm Licking My Wounds From A Bad Sale' - NVIDIA (NASDAQ:NVDA)

Stanley Druckenmiller expressed desire to get back into the stock if it pulls back. 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%. Read Next: Nvidia Supplier TSMC Q3 Trumps Estimates On Strong AI Chip Demand, Guides Q4 Above Consensus Photo courtesy: Shutterstock Market News and Data brought to you by Benzinga APIs