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Billionaire investor cuts Nvidia position, warns of AI ‘overhype’

Billionaire investor cuts Nvidia position, warns of AI 'overhype'
Elmaz Sabovic

Billionaire investor Stanley Druckenmiller, who heads the Duquesne Family Office, an investment firm overseeing a portfolio of over $3 billion, recently stated that AI is being overhyped. He mentioned reducing his stake in Nvidia (NASDAQ: NVDA) significantly.

‘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,’ he said in an interview with CNBC on May 7.

During the same trading session, NVDA stock declined 1.72%, bringing its price down to $905.54. Additionally, pre-market trading indicated further losses of 0.15%.

NVDA stock 24-hour price chart. Source: Finbold
NVDA stock 24-hour price chart. Source: Finbold

Early investments in Nvidia before the AI hype

Druckenmiller’s recent remarks on AI and Nvidia signal a notable change in his stance. Last year, he significantly bolstered his investment in Nvidia by selling shares and acquiring call options, as revealed in the latest quarterly filings outlining his funds’ holdings in U.S. stocks.

His investment decisions have been guided by his belief in the potential of the AI revolution. 

Over the past year, he has made significant investments in Microsoft (NASDAQ: MSFT) and Nvidia, initially investing in the latter towards the end of 2022 before the launch of ChatGPT

Druckenmiller offered alternatives and weighed in on politics

Duquesne Family Office, Druckenmiller’s firm, had invested in Argentina stocks based on his belief in the country’s new president, Javier Milei, who is currently undertaking radical economic measures, as Argentina has recorded its first budget surplus in 16 years.

His political views also influence his investment decisions. He has expressed concerns about the potential economic impact of the upcoming U.S. election. If President Joe Biden wins reelection, he predicts stagflation, while a victory for former President Donald Trump could lead to 6% inflation. 

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