It’s 13-F filing season once again, which means ordinary investors like you and I get to peer into the portfolios of some of the world’s most influential and knowledgeable investors. In reviewing the releases of two famous family offices run by Stanley Druckenmiller and George Soros, it appears the recent rally in Nvidia (NVDA) stock may be coming to an end, or at least these billionaires are looking at now as a good time to cash in. At the time of writing, NVDA stock has dropped about 1.75% on this news.
Druckenmiller offloaded a significant 75,000 shares in Nvidia this past quarter, netting more than $37 million according to estimates provided in the 13-F filing. Notably, Soros Fund Management exited its stake in the high-performance chip maker, selling around $5 million worth of stock this past quarter.
Now, given Nvidia’s market capitalization, which still stands at around $1.2 trillion, these stock sales don’t really amount to much and are a drop in the bucket. But when the smart money moves elsewhere, investors take notice.
Let’s dive into what to make of these transactions today.
NVDA Stock Dips as Big Money Investors Look Elsewhere for Growth
Nvidia’s run this year has been truly incredible, with NVDA stock soaring from less than $150 per share to start the year to more than $500 at its peak. This more than tripling of the company’s share price has certainly provided a nice boost for hedge funds, such as those run by Soros and Druckenmiller, who rode the wave of AI enthusiasm via Nvidia this year.
However, trees don’t grow to the sky, and the name of the game remains “buy low, sell high.” Taking profits when a given stock has run past its intrinsic value is what these smart money investors do. Accordingly, transactions that may appear immaterial to the overall story for a given company can impact the decision-making paradigms of millions of smaller investors, inducing the kinds of selloffs we’re seeing today.
It’s also worth noting that Nvidia’s decline today comes amid a broad market rally, with investors looking to add risk as bond yields decline. We’ll have to see if this decline continues for Nvidia, but it appears investors are taking a harder look at fundamentals, and on that front, NVDA stock looks expensive here.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
