Billionaire Investors Sell Off Nvidia Stocks Amid Market Concerns

Data flows abundantly on Wall Street. During earnings season—the six-week period each quarter when many S&P 500 companies report their financial results—along with U.S. government economic data releases, investors rarely lack catalysts to influence the broader market.

Among the most anticipated updates is Nvidia (NASDAQ: NVDA), which will announce its fiscal fourth-quarter and full-year operating results following the close on Feb. 26. Nvidia’s fiscal 2025 ended on Jan. 26, 2025, setting the stage for keen investor interest.

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Nvidia has positioned itself at the forefront of the artificial intelligence (AI) revolution, particularly in the last two years. With its Hopper (H100) graphics processing unit (GPU) and next-gen Blackwell GPU architecture, the company remains a key player in enterprise AI-accelerated data centers, enabling AI systems to make rapid decisions.

Image source: Getty Images.

As investors prepare for Nvidia’s results, several billionaire fund managers have already expressed their stances through significant actions—shedding light on Wall Street’s view of this AI frontrunner.

Billionaire Fund Managers’ Insights from Recent 13F Filings

Institutional investors managing at least $100 million in assets are required to file Form 13F with the SEC within 45 days after a quarter ends. These filings reveal which stocks notable money managers are buying and selling.

Even though these filings lag behind real-time activities, they offer valuable insight into the stocks capturing the attention of top-tier investors. Nvidia’s notable growth resulting from AI developments has attracted scrutiny, yet those same investors appear to be taking decisive steps away from Nvidia.

• Philippe Laffont of Coatue Management: Sold 39,795,532 shares of Nvidia, reflecting an 80% reduction since Q1 2023.
• David Tepper of Appaloosa Management: Sold 9,569,999 shares since Q3 2023, a decrease of 93%.
• Stanley Druckenmiller of Duquesne Family Office: Liquidated his full stake of 9,500,750 shares since Q2 2023.
• Stephen Mandel of Lone Pine Capital: Cleared his entire holding of 6,416,490 shares since Q2 2023.

Reasons Behind the Selling Trend of Nvidia Stocks

These sales suggest several concerns surrounding Nvidia. Firstly, profit-taking could be a primary motive, as these investors recognize that Nvidia’s dramatic increase in market value, roughly $3 trillion, is not typical for public companies.

A second possibility points to growing competition, particularly from Nvidia’s customers who are developing their own AI chips. If these self-produced chips, though potentially slower than Nvidia’s, are more economically viable, Nvidia risks losing market share.

The regulatory climate represents a third concern for these investors. The Biden administration’s restrictions on high-powered AI chip exports to China could jeopardize Nvidia’s sales, affecting its bottom line.

Moreover, the historic patterns of the tech market serve as a potential warning. Past innovations often faced bubble bursts early in their lifecycle, suggesting that should the AI market falter, Nvidia may suffer significantly.

Lastly, Nvidia’s valuation has raised eyebrows. Though not drastically expensive relative to future earnings, its price-to-sales (P/S) ratio reached a peak above 42 last summer, signaling potential overvaluation concerns given historical trends.

Evaluating an Investment in Nvidia

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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.