Benzinga - by Adam Eckert, Benzinga Staff Writer.
Billionaire investor Stanley Druckenmiller, who runs the Duquesne Family Office, has tapped the brakes on his Nvidia Corp (NASDAQ:NVDA) investment as he believes the artificial intelligence revolution has gone too far too fast.
What To Know: Druckenmiller has been betting on AI for more than a year with positions in Nvidia, Microsoft Corp (NASDAQ:MSFT) and other tech leaders. Recent quarterly filings show that he even bought call options in Nvidia stock to help boost his investment exposure.
Tuesday on CNBC’s “Squawk Box,” Druckenmiller noted that he recently reduced his exposure to Nvidia because of the stock’s incredible surge from around $150 per share to more than $900 per share in just over a year.
“I'm not Warren Buffett,” Druckenmiller said. “I don't own things for 10 or 20 years. I wish I was Warren Buffett.”
There have been several beneficiaries of the AI boom, but Nvidia is certainly the poster child, as its AI chips have experienced exorbitant demand as other company’s race to train and build their own AI models. Nvidia shares have more than tripled over a one-year period. The stock rallied 238% in 2023 and is already up another 66% year-to-date.
Druckenmiller told CNBC that he initially doubled down on his Nvidia position when Microsoft-backed ChatGPT surged in popularity.
“Even an old guy like me could figure out what that meant,” Druckenmiller said.
Check This Out: ChatGPT Is Not A ‘Long-Term’ Engagement Model, OpenAI’s Top Executive Says: ‘Today’s Systems Are Laughably Bad’
At that time, he expected to hold his Nvidia position for at least two or three years as he anticipated that the AI boom was going to be a “mega trend like we’ve never seen” and could potentially be bigger than the internet, he said.
“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,” Druckenmiller said.
The legendary investor noted that he’s still bullish on the prospects of AI longer term. His decision to slash his Nvidia stake was more about the incredible run from $150 to $900 in such a short period of time, he explained.
"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. So AI might be a little overhyped now, but underhyped long term,” Druckenmiller said.
NVDA Price Action: Nvidia shares were down 0.76% at $914.13 at the time of publication, according to Benzinga Pro.
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