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Advanced Micro Devices
-- 119.210 
Stanley Druckenmiller Cut His Stake in Nvidia Stock
In a CNBC interview, billionaire investor Stanley Druckenmiller revealed that he trimmed his exposure to $NVIDIA (NVDA.US)$ stock earlier this year. “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,” said Druckenmiller.
Specifically, Druckenmiller took some profits off the table when “the stock went from $150 to $900.” He then took a comical job at an investing legend. “I’m not Warren Buffett — I don’t own things for 10 or 20 years. I wish I was Warren Buffett,” the former hedge fund manager remarked.
This investing decision may prove to be a wise move. While NVDA stock has gained almost 88% on a year-to-date (YTD) basis, momentum has slowed since late March. In the trailing month, shares have gained less than 4%.
This investing decision may prove to be a wise move. While NVDA stock has gained almost 88% on a year-to-date (YTD) basis, momentum has slowed since late March. In the trailing month, shares have gained less than 4%.
Interestingly, Druckenmiller revealed that he first discovered the opportunity in NVDA stock via a young partner at his firm. The Nvidia advocate believed that the sentiment surrounding AI would exceed that for blockchain.
Since then, however, multiple enterprises have bought into the AI narrative, naturally propelling NVDA stock to unbelievable heights. That is causing the billionaire investor to offer a more nuanced perspective. “So AI might be a little overhyped now, but underhyped long term,” Druckenmiller said. It’s not an unreasonable thesis.
Nvidia is scheduled to disclose its first-quarter earnings report on May 22. Analysts are looking for a big boost across the board, with EPS potentially landing at $5.55 per share on revenue of $24.49 billion. These stats are well above the year-ago quarter’s print of 98 cents per share on revenue of $6.52 billion.
However, the tech-centric Nasdaq Composite has been choppy since April 11. Further, $Super Micro Computer (SMCI.US)$ recently suffered a big drop despite beating revenue and profitability targets. That might mean Nvidia needs a groundbreaking report to please possibly jaded analysts.
Nvidia is scheduled to disclose its first-quarter earnings report on May 22. Analysts are looking for a big boost across the board, with EPS potentially landing at $5.55 per share on revenue of $24.49 billion. These stats are well above the year-ago quarter’s print of 98 cents per share on revenue of $6.52 billion.
However, the tech-centric Nasdaq Composite has been choppy since April 11. Further, $Super Micro Computer (SMCI.US)$ recently suffered a big drop despite beating revenue and profitability targets. That might mean Nvidia needs a groundbreaking report to please possibly jaded analysts.
Why It Matters
During the CNBC interview, Druckenmiller noted that the “big payoff” regarding the AI narrative “might be four to five years from now.” That puts the near-term forecasted trajectory of NVDA stock into perspective. Right now, analysts on average believe Nvidia shares will reach $1,005.59 per share in the next 12 months. That’s limited upside for what could be a major downside risk if the company fails to impress onlookers.
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