Billionaire Stanley Druckenmiller Sold Nvidia and Broadcom and Is Buying This Spectacular Artificial Intelligence (AI) Stock Instead

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Adam Levy, The Motley Fool

Wed, Apr 2, 2025, 3:00 AM 5 min read

Such was the lawsuit successful precocious 2022, erstwhile helium started buying a immense involvement successful Nvidia arsenic OpenAI launched ChatGPT. By the adjacent summertime helium had accumulated implicit 950,000 shares of the starring AI stock, and it accounted for 14% of the portfolio held his Duquesne Family Office.

But by past fall, Druckenmiller had wholly sold his Nvidia shares and bought competing chipmaker Broadcom instead. He rapidly sold those shares arsenic well, and ended 2024 without either of the 2 largest AI chipmakers successful his portfolio.

He's present turned his attraction and superior to different artificial quality banal that looks similar a spectacular concern accidental astatine its existent price.

Bear and bull figurines lasting connected a smartphone displaying a banal chart.

Druckenmiller's determination to merchantability some Nvidia and Broadcom appears to person been motivated by conscionable 1 thing: valuation. In an interrogation with CNBC past May, helium said "AI mightiness beryllium a small over-hyped now." Nvidia shares had climbed implicit 600% from his archetypal acquisition by the extremity of the archetypal 4th past year, climbing 82% successful the archetypal 3 months of 2024 alone.

Even arsenic Nvidia was blowing distant net expectations, Druckenmiller felt, astatine that point, thing astir apt had to springiness going forward. Even a flimsy disappointment from Nvidia could nonstop the shares crashing fixed its valuation and expectations for the company.

When helium shifted immoderate superior to Broadcom, it came arsenic much attraction was moving to customized silicon solutions for the hyperscale unreality providers. Broadcom CEO Hock Tan enactment a immense spotlight connected that accidental during the company's fourth-quarter net telephone successful December. He announced that the institution is moving with 2 caller hyperscalers successful summation to 3 existing customers for customized AI accelerators and suggested the marketplace for Broadcom's AI chips could scope $90 cardinal by 2027.

That sent shares to a caller all-time high, and Broadcom's valuation climbed overmuch higher arsenic a result. Druckenmiller took the speedy win, and decided to redeploy superior elsewhere.

It's worthy noting that Druckenmiller aboriginal said it was a mistake to merchantability Nvidia arsenic aboriginal arsenic helium did. He remains highly bullish connected artificial quality successful the agelong tally and suggested he'd bargain shares again if they came down successful price. That mightiness mean he's buying Nvidia banal during the existent merchantability off, but we'll person to hold until May to find out.