Stanley Druckenmiller sold his entire Nvidia stake in 2024 and has not returned, even as the chipmaker's valuation dropped. Instead, the billionaire opened a new position in rival Advanced Micro Devices in the second quarter, buying 72,900 shares.
Stanley Druckenmiller isn't buying Nvidia again. Instead, the billionaire investor opened a position in Nvidia rival Advanced Micro Devices in the second quarter, buying 72,900 shares that now make up 0.8% of his portfolio.
Druckenmiller built a significant Nvidia stake back in 2022, and the stock was his biggest position for a good part of the following year. But in 2024 he sold all his Nvidia shares, saying the valuation had become rich, though he later said he would consider buying back in at a lower valuation.
Nvidia's cheaper valuation hasn't lured him back
Since then, Nvidia's valuation has declined, and it even reached a low of 17x forward earnings estimates earlier this year. That hasn't been enough to bring Druckenmiller back, however. He instead turned to AMD, a stock that has soared more than 100% this year.
Druckenmiller ran the hedge fund Duquesne Capital Management for 30 years, delivering an average annual return of 30% without a single money-losing year. He now oversees $5.2 billion at the Duquesne Family Office.
AMD's smaller base leaves room to grow
AMD's revenue is considerably lower than Nvidia's, which may give it more room to grow. In the recent quarter, Nvidia's revenue topped $96 billion, while AMD generated $11 billion. Meanwhile, AMD's data center revenue doubled in the recent quarter, and the company recently launched its AMD Helios rackscale system.
AMD also remains a leader in the CPU market, even as Nvidia pushes into that space. CPUs are emerging as key tools for powering AI agents, positioning AMD to benefit as AI moves into real-world applications.
Still, AMD isn't cheap. The stock trades at more than 60x forward earnings estimates, a level that looks expensive even with the company's AI prospects. Investors following Druckenmiller's move may want to wait for a more favorable entry point.
Source: The Motley Fool
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