Did Billionaire Stan Druckenmiller Sell Nvidia Too Early, Or Just The Right Time?

Stanley Druckenmiller is a legendary billionaire investor and former hedge fund manager who has generated a significant following due to his sharp market insights and strategic investment decisions. After founding Duquesne Capital Management in 1981 and managing George Soros’ Quantum Fund, he built a reputation for making bold yet calculated market moves. These moves included the famous 1992 shorting of the British pound that earned over $1 billion in profits.

While most of the praise for that decision ultimately flowed through to Soros and his following, Druckenmiller’s prescient calls on other key trends have proven to be very profitable for his firm, and those who have followed his market moves.

Thus, when this man makes a big move, many investors perk up. Druckenmiller’s recent headline-popping news is around the guru’s move to completely exit his Nvidia (NASDAQ:NVDA) position in the fourth quarter of 2024. This move is especially notable when one thinks about the rally in Nvidia stock to that point, and the absolute hysteria around the AI trade (which is still mostly intact, depending on who you ask).

Let’s dive into whether this move by Druckenmiller in Nvidia stock is one that investors should follow, and whether this will ultimately look like a good or bad play in hindsight. 

Should Investors Follow and Sell Nvidia?

Nvidia’s recent selloff toward the $105 level has caught many long-term bulls offsides. Additionally, it’s true that even the most ardent bulls are now questioning whether the secular growth tailwinds underpinning Nvidia will be enough to propel this company higher over the long-term, or if there’s a brewing thesis worth considering that this is a company that could be considered a hold (or God forbid a sell) in this current market climate.

One thing is for certain – Nvidia stock is much cheaper at current levels than it was to start the year. Down more than 10% in 2025 thus far at the time of writing, Nvidia’s forward price-earnings multiple has sunk to less than 25-times. And for a company that’s growing revenues and earnings in the high double-digit range, that’s a very reasonable multiple.

We’ll have to see if Nvidia can maintain its sky-high margins over time, and whether newfound competition from the likes of DeepSeek and others will drive uncertainty (and additional selling pressure) for some time from here. In my view, this is a company that continues to have strong growth potential over the long-term and an increasingly reasonable valuation, which should provide some floor to its most recent downside. 

Short-Term Vs. Long-Term Perspective

Over the short-term, I do think there’s a solid case to be made that Druckenmiller could be right in terms of his directional bet on Nvidia. Yes, this is a stock with very strong secular growth tailwinds, and a decent likelihood of continuing on its trajectory to even more incredible highs over time. 

However, it’s also true that there’s a fair amount of “animal spirits” or hype and euphoria that have driven the outsized spending trends seen in corporate America, which have flown through to Nvidia’s top and bottom line in recent quarters. If this spending slows, even for a short amount of time, it’s possible that any sort deceleration or degradation of Nvidia’s outlook could lead to a continued dip. That’s something Druckenmiller appears to be increasingly worried about, and at least as of the past week, he’s been proven right. 

Again, my view is that Nvidia is likely a long-term winner, with significant short-term volatility likely to continue. For those who can stomach this volatility, it may not be a terrible buy at current levels. 

The post Did Billionaire Stan Druckenmiller Sell Nvidia Too Early, Or Just The Right Time? appeared first on 24/7 Wall St..