Major Investors Exit Nvidia Amid AI Bubble Fears
"Bond King" Gundlach Warns: "U.S. Stock Market Is Extremely Fragile"
As concerns over an artificial intelligence (AI) investment bubble continue to mount, major global investors are offloading their holdings in Nvidia one after another. Leading Wall Street investors are also warning about the overvaluation of tech stocks, fueling anxiety that the AI investment cycle may have reached its peak.
According to a report submitted to the U.S. Securities and Exchange Commission (SEC) by Thiel Macro Fund, operated by billionaire investor Peter Thiel, founder of PayPal and Palantir, on the 17th (local time), the fund sold all 537,742 shares of Nvidia it held between July and September. Based on Nvidia's average share price during this period, the sale is estimated to be worth around 100 million dollars (approximately 146 billion won).
In addition to Nvidia, Thiel also significantly reduced his stake in Tesla from 272,613 shares to 65,000 shares. On the other hand, he restructured his portfolio by newly acquiring 79,181 shares of Apple and 49,000 shares of Microsoft. With Nvidia, the leading AI stock, completely removed from his portfolio, the market is interpreting this as a warning signal of an AI bubble.
Previously, Japan’s SoftBank, led by Chairman Masayoshi Son, also sold its entire stake in Nvidia last month for 5.83 billion dollars (about 8.525 trillion won). Michael Burry, the real-life investor portrayed in the film "The Big Short" who predicted the 2008 global financial crisis, also disclosed short positions on Nvidia and Palantir. As key investors continue to sell or hedge their Nvidia holdings, anxiety over AI investments is intensifying.
Among investors, skepticism is growing over whether the massive capital expenditures required for AI development can lead to sustained high profitability over the long term. Especially after Nvidia became the world’s first company to reach a market capitalization of 5 trillion dollars (about 7,310 trillion won) last month, optimism and bubble concerns over AI have been in fierce contention on Wall Street, resulting in a roller-coaster stock market.
Adding to this, Jeffrey Gundlach, CEO of DoubleLine Capital and known as the "Bond King," also raised his guard by pointing out the overheated stock market. Appearing on Bloomberg’s “Odd Lots” podcast, he said, “The current health of the U.S. stock market is the most fragile I have seen in my entire career,” adding, “The market is unbelievably speculative, and this kind of speculative environment is soaring to extremely high levels. This happens every time.”
As major global investors continue to warn of AI overheating and scale back their positions, Nvidia’s earnings announcement scheduled for the 19th is expected to be a key turning point for the future market trend.
Ross Mayfield, investment strategist at Baird, commented, “We need to confirm that demand for Nvidia remains and is not slowing down,” and added, “If the outlook for chip demand declines even slightly, the market will react negatively.”
Dennis Palmer, Chief Investment Officer (CIO) at Montis Financial, predicted, “Even if Nvidia reports strong results and raises its earnings outlook, it would not be surprising,” but warned, “Concerns over endless AI capital spending could grow even further.”
Meanwhile, Alphabet’s stock price jumped 3.11% after it was disclosed that Berkshire Hathaway, led by legendary investor Warren Buffett, newly acquired a stake in Google’s parent company worth 4.3 billion dollars (6.288 trillion won). The market is now watching closely to see if Berkshire Hathaway, which has traditionally focused on value stocks, will continue to expand its investments in large-cap growth tech stocks. Nvidia shares fell by 1.88%.
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