Shares of Nvidia (NASDAQ: NVDA) fell briefly today, falling as much as 10.7% early in the trading session, but recouped those losses during the morning, dropping the session by just 1.7%.
The catalyst for the movement was the comments of famed billionaire investor Stanley Druckenmiller.
What did Druckenmiller say about Nvidia?
In an interview on CNBC this morning, Druckenmiller, who had an impeccable track record as manager of the Duquesne Capital Management fund for nearly three decades, said he had reduced his stake in Nvidia in late March.
Druckenmiller argued that it was time to take profits in the stock, saying: “A lot of what we recognized has now been recognized by the market.”
The former hedge fund titan saw Nvidia’s potential early on in the generative AI boom when his Duquesne Family Office aggressively moved into Nvidia stock in the fourth quarter of 2022 when ChatGPT launched.
Druckenmiller started selling his stake in Nvidia in the fourth quarter, although in retrospect that seems premature as AI shares surged again in the first quarter of this year.
We’ll learn how much of his Nvidia stake he’s cut when 13F reports come in over the next week.
Why Nvidia Stock Bounced Back
There was no specific catalyst for the recovery of Nvidia stock. Shares appeared to rise as some investors believed the sharp decline was a buying opportunity.
Druckenmiller wasn’t particularly bearish on Nvidia and expressed long-term optimism for AI, but he seemed content with taking profits as the stock has soared since he first started buying.
While Nvidia is unlikely to see more multibagging returns, given that the company is now worth more than $2 trillion, the stock could continue to outperform. We’ll learn more when Nvidia reports first-quarter results later this month.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
Why Nvidia Stock Briefly Plummeted and Then Rebounded Today was originally published by The Motley Fool
