Shares of Nvidia (NASDAQ: NVDA) briefly tumbled today, falling as much as 10.7% early in the trading session, but recovered those losses throughout the morning to finish the session down just 1.7%.
The catalyst for the movement was comments from famed billionaire investor Stanley Druckenmiller.
What did Druckenmiller say about Nvidia?
In an interview on CNBC this morning, Druckenmiller, who had an impeccable record running the Duquesne Capital Management fund for nearly 30 years, said he’d cut his Nvidia stake in late March.
Druckenmiller argued that it was time to take profits in the stock, saying, “A lot of what we recognized has become recognized by the marketplace now.”
The former hedge fund titan was early to recognize Nvidia’s potential in the generative AI boom as his Duquesne Family Office moved aggressively into Nvidia stock in the fourth quarter of 2022 when ChatGPT launched.
Druckenmiller began selling his Nvidia stake in Q4, though that looks premature in retrospect as the AI stock surged again in this year’s Q1.
We’ll learn how much of his Nvidia stake he cut when 13F reports come in over the next week.
Why Nvidia stock bounced back
There was no particular catalyst for the recovery in Nvidia stock. Shares seemed to gain as some investors believed the sharp decline to be a buying opportunity.
Druckenmiller wasn’t particularly bearish on Nvidia and expressed long-term optimism for AI, but he seemed content to take profits as the stock has surged since he first began buying.
While we’re unlikely to see more multibagging returns from Nvidia as the company is now worth more than $2 trillion, the stock could continue to outperform. We’ll learn more when Nvidia reports Q1 earnings later this month.
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Jeremy Bowman 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.
Why Nvidia Stock Briefly Plunged and Then Recovered Today was originally published by The Motley Fool
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