Billionaire investor Stanley Druckenmiller said Tuesday that he cut his big bet on chipmaker Nvidia earlier this year, saying the meteoric boom in artificial intelligence may be overblown in the short term.
“We cut this and many other positions at the end of March. I just need a break. We did a great job. A lot of what we recognized is now recognized by the market,” Druckenmiller said on CNBC. “Scream Boxing”
Druckenmiller said he cut the bid after “the stock price went from $150 to $900.” “I’m not Warren Buffett—I haven’t owned things for 10 or 20 years. I wish I was Warren Buffett,” he added.
Nvidia has been a major beneficiary of the tech industry’s recent obsession with large artificial intelligence models being developed on the company’s expensive server GPUs. The stock was one of its best performers last year, rising a whopping 238%. The stock is up another 66% in 2024.
The prominent investor, who now runs the Duquesne family office, said he was introduced to Nvidia in the fall of 2022 by a young partner who believed the hype about blockchain would be far outweighed by artificial intelligence.
“I didn’t even know how to spell it,” Druckenmiller said. “I bought it. And a month later ChatGPT appeared. Even an old man like me could understand what this meant, so I increased my position substantially.”
Although Druckenmiller trimmed his position in Nvidia this year, he said he remains optimistic about the capabilities of artificial intelligence in the long term.
“So AI may be a little overvalued now, but undervalued in the long term,” he said. “AI can rhyme with the Internet. As we go through all these capital expenditures, we need to get the returns as they come in little by little each day. The big payoff could happen in four to five years.”
The well-known investor also owned Microsoft And Alphabet how the AI has played over the past year.
Druckenmiller once managed George Soros’ Quantum Fund and rose to fame after helping place a $10 billion bet against the British pound in 1992. He later oversaw $12 billion as president of Duquesne Capital Management before closing his firm in 2010.
