As Nvidia (NASDAQ: NVDA) stock builds momentum after weeks of high volatility, it has emerged that billionaire investors are increasingly dumping the equity at a significant rate.
Notably, the offloading of NVDA has coincided with a period during which the stock rallied significantly, mainly boosted by the chipmaker’s bet on the artificial intelligence (AI) space.
By the close of markets on August 15, NVDA was trading at $122, having gained over 4% on the daily chart. On the weekly timeframe, the stock rebounded by over 14%, with investors now eyeing the $125 resistance level.
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The liquidation of the equity was revealed in newly filed 13F documents on August 14. Seven influential billionaire asset managers reduced their positions during the quarter ending June. Among the most notable sales were Ken Griffin of Citadel Advisors, who sold 9,282,018 shares, and David Tepper of Appaloosa, who offloaded 3,730,000 shares.
Stanley Druckenmiller of Duquesne Family Office sold 1,545,370 shares, while Cliff Asness of AQR Capital Management parted with 1,360,215 shares. Other significant sellers included Israel Englander of Millennium Management, Steven Cohen of Point72 Asset Management, and Philippe Laffont of Coatue Management.
It’s worth noting that this exodus of billionaire investors is not an isolated incident. During the March and December quarters of the previous year, a similar trend emerged, with several prominent investors selling off substantial portions of their Nvidia holdings.
AI predicts NVDA’s price
The massive sell-off by these prominent investors raises questions about Nvidia’s future and how the stock is likely to trade in the coming months. In this context, Finbold turned to OpenAI’s ChatGPT-4o AI tool to gather insights into how the equity might trade by the end of 2024.
The analysis indicated that while profit-taking after a meteoric rise in the AI’s stock price is logical, deeper concerns may be involved.
According to the AI platform, if the billionaire exodus triggers further selling by institutional investors, Nvidia’s shares could face significant downward pressure. Coupled with potential headwinds such as increased competition, an economic slowdown, or weaker-than-expected financial performance, Nvidia’s stock might drop below $100 by the end of 2024.
On the other hand, NVDA could defy pessimism if it continues to lead in technological innovation, especially in the AI and gaming sectors. Should the company introduce groundbreaking new products or capitalize on high market demand, the AI model predicts that Nvidia could recover and even reach $150 or higher by the end of the year.
Factors influencing Nvidia’s share price
ChatGPT-4o noted that while profit-taking is the most straightforward explanation, several other factors might be influencing these investment decisions. The billionaire exodus could signal broader concerns about the tech sector’s short-term prospects, particularly as economic uncertainties loom.
Additionally, the sharp rise of NVDA may have led some investors to believe that it is overvalued in the current market conditions. Rivals in the semiconductor and AI sectors may also be closing in, and any slowdown in the tech giant’s innovation pipeline could make investors jittery.
Notably, the jitters have likely been exacerbated by Nvidia insiders’ selling spree, which aligns with the billionaire investors and signals a possible lack of confidence in the stock.
At the moment, NVDA’s next trajectory is heavily reliant on the upcoming Q2 2024 results, which will indicate how the company is coping amid growing competition in the AI space.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
