Technology
Tuesday, May 7th, 2024 1:59 pm EDT
Key Points
- Stanley Druckenmiller slashed his large investment in Nvidia in late March 2024, citing the need for a break after an exceptional run and concerns that the AI boom may be overhyped in the short term.345
- Druckenmiller reduced his Nvidia position after the stock surged from $150 to $900, stating he does not hold investments for extended periods like Warren Buffett.345
- Despite cutting his Nvidia stake, Druckenmiller remains bullish on AI’s long-term potential, likening it to the transformative impact of the internet, with the significant payoff expected in four to five years.
Billionaire investor Stanley Druckenmiller, known for his successful bets and managing George Soros’ Quantum Fund, recently revealed that he had slashed his substantial investment in chipmaker Nvidia earlier this year. Speaking on CNBC’s “Squawk Box,” Druckenmiller acknowledged the need for a break after an exceptional run, stating, “We did cut that and a lot of other positions in late March. I just need a break. We’ve had a hell of a run. A lot of what we recognized has become recognized by the marketplace now.”345Druckenmiller’s decision to reduce his Nvidia stake came after the stock’s remarkable surge from $150 to $900, a testament to the company’s position as a primary beneficiary of the artificial intelligence (AI) boom. Nvidia’s graphics processors are crucial for developing large AI models, propelling the stock to become one of the best performers last year with a staggering 238% rally, followed by an additional 66% increase in 2024.345Despite trimming his Nvidia position, Druckenmiller remains bullish on the long-term potential of AI. He acknowledged that while AI might be overhyped in the short term, its impact could be as transformative as the internet. “AI might be a little overhyped now, but underhyped long term,” he said. “AI could rhyme with the Internet. As we go through all this capital spending we need to do, the payoff while it’s incrementally coming in by the day. The big payoff might be four to five years from now.”345Druckenmiller’s journey with Nvidia began in the fall of 2022 when his young partner introduced him to the company, believing that the excitement surrounding blockchain would be overshadowed by AI. Initially unfamiliar with the company, Druckenmiller admitted, “I didn’t even know how to spell it.” However, the release of ChatGPT a month later solidified his understanding of AI’s potential, prompting him to substantially increase his position.34In addition to Nvidia, Druckenmiller also held positions in Microsoft and Alphabet as AI plays over the past year, further demonstrating his conviction in the transformative power of this technology.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/05/07/stanley-druckenmiller-cut-his-nvidia-stake-in-late-march-says-ai-may-be-a-bit-overhyped-short-term.html
