Billionaire investor Stanley Druckenmiller reveals he thinks AI is 'overhyped' - as he slashes his big bet in rocketing Nvidia
- The private wealth manager said Nvidia and AI stocks are 'a little overhyped'
- Druckenmiller admitted he couldn't spell Nvidia when he bought it in fall 2022
- The ex-manager of George Soros' fund said AI's 'big payoff' could be in five years
A billionaire investor has claimed artificial intelligence is 'overhyped' as he pulled back on a huge investment in a booming company.
Stanley Druckenmiller, worth over $6 billion, said he slashed his stocks in Nvidia in late March, despite the shares making a historic run over the last few years.
He decided to take the gains, adding the AI surge that's been seen since ChatGPT burst onto the scene in November 2022 could mean AI stocks are overvalued.
Hedge fund manager Stanley Druckenmiller, right, speaks while his wife Fiona Druckenmiller listens at the Langone Medical Center Violet Ball in New York on May 4, 2011. Druckenmiller had recently closed his hedge fund Duquesne Capital Management
Nvidia stock is up over 2,000 percent over the last five years, with a notable pickup in 2023 and 2024 as the AI boom continues
'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 on CNBC show 'Squawk Box.'
Druckenmiller, who founded and runs the Duquesne Family Office, said he reduced his stake in Nvidia after 'the stock went from $150 to $900.'
He added that his investment strategy differs from Warren Buffett, who just recently announced his decision to sell billions of dollars worth of Apple stock.
'I'm not Warren Buffett; I don't own things for 10 or 20 years. I wish I was Warren Buffett,' Druckenmiller said.
The last time Nvidia shares were near $150 was again when OpenAI released its instant success ChatGPT on November 30, 2022.
Over the last year, the chipmaker's stock has rocketed up more than 216 percent. Over the last five, Nvidia has seen a 21-fold increase in value.
One of the primary reasons Nvidia has been one of the best performing stocks of 2023 and 2024 is because its graphics cards are largely used to develop the AI models that have become so popular, CNBC reported.
Druckenmiller said he was introduced to Nvidia stock by one of his younger partners in fall 2022.
Druckenmiller admitted he didn't know how to spell Nvidia when he bought shares of the chipmaker back in 2022
Druckenmiller said he was no Warren Buffett, who's known for his strategy of holding onto blue chip stocks for decades. Buffett recently reduced his stake in Apple, another company trying to take advantage of the AI goldrush
'I didn't even know how to spell it,' he said. 'I bought it. Then a month later ChatGPT happened. Even an old guy like me could figure out okay, what that meant, so I increased the position substantially.'
Even though Druckenmiller cashed out on a portion of his Nvidia holdings, he said he still believes AI will be a hugely important investment sector in the coming years.
'So AI might be a little overhyped now, but underhyped long term. AI could rhyme with the Internet,' he said. 'The big payoff might be four to five years from now.'
Druckenmiller's other AI plays include Microsoft and Alphabet, both of which he owns. Both tech giants have seen double digit gains in their shares year to date.
Druckenmiller began his career in 1981 as the president and founder of hedge fund Duquesne Capital Management, which oversaw $12billion in assets when he closed the firm in 2010. He also managed George Soros' Quantum Fund from 1988 to 2000.
