From the largest position to a significant reduction, "Soros' comrade" cuts its stake in NVIDIA

From holding the largest position to significantly reducing it, a 180-degree turn in attitude, has AI been excessively hyped in the short term?

According to media reports on Tuesday, former Soros deputy and billionaire Stanley Druckenmiller revealed that he significantly reduced his position in NVIDIA earlier this year and indicated that the artificial intelligence boom may be overhyped in the short term.

Prior to this, based on his fund's holdings, at the end of last year, he increased his bet on NVIDIA by selling stocks and buying call options, making NVIDIA his largest position at one point. His fund held nearly $550 million worth of NVIDIA shares, accounting for about 16% of his total shares outstanding.

Druckenmiller stated in a media program:

We did cut back on NVIDIA and many other positions at the end of March. I just needed a break. We've had a hell of a run. A lot of things we recognized are now being recognized by the market.

I'm not Warren Buffett. I can't hold stocks for 10 to 20 years. Sometimes I wish I were Buffett.

Druckenmiller discussed the reasons for buying NVIDIA:

In the fall of 2022, a young partner introduced me to NVIDIA. I couldn't even spell it, but I bought it anyway.

A month later, ChatGPT came out, and even an old guy like me could understand what that meant, so I significantly increased my position.

NVIDIA was one of the best-performing stocks last year, soaring an astonishing 238%, and has risen another 66% so far this year.

After NVIDIA's stock price surged from $150 to $900, he reduced his position. NVIDIA's stock price fell over 1% on Tuesday and is currently trading at $909.

Despite reducing his NVIDIA holdings, Druckenmiller remains optimistic about the power of artificial intelligence in the long run.

Artificial intelligence may be overhyped now, but it is still underestimated in the long term. AI may replicate the miracle of the internet. As we make massive capital expenditures, returns will increase daily, and the real substantial returns may not come until 4 to 5 years later.

Furthermore, Druckenmiller also mentioned that his fund has invested in Argentine stocks because he believes in the new Argentine president, Milei. When discussing the upcoming U.S. election in November, he said that if Biden wins reelection, the U.S. will face stagflation, while if former President Trump wins, the U.S. may experience 6% inflation.