In mid-June, Nvidia was the world's most valuable company, with a market capitalization of $3.34 trillion. Today, it is the No. 2 company in the world by market capitalization, with a market cap of $3.329 trillion. However, some investors sold Nvidia stock just before the 10-to-1 split in May because they thought it was too expensive. One of them is Stanley Druckenmiller, who now deeply regrets his actions, he told Bloomberg.
Stanley Druckenmiller, who used to be the head of Duquesne Capital and is now a top-down investor running Duquesne Family Office LLC, regrets the decision he now considers a mistake. Initially, he planned to hold his Nvidia stock for years but sold it when it was priced between $800 and $950, missing its rise to $1,300. At a conference 18 months earlier, he was confident in maintaining the investment long-term. However, when Nvidia's value tripled in just a year, he felt the valuation was too high and decided to sell as he was not the kind of investor to hold through such rapid gains.
According to CNBC, in the third quarter of 2023, Nvidia was Duquesne's largest position, with 8.75 million shares valued at about $400 million. Then he started selling. At the start of the year, Duquesne held 6.18 million Nvidia shares, which dropped to 1.76 million by Q1's end and 214,000 by Q2's close. Had the fund kept that stake, it would now be worth roughly $1.19 billion. The firm has not yet shared its Q3 holdings this year, so we do not know how much it lost in missed opportunities. Still, with a net worth of $9.98 billion, Druckenmiller is rich anyway.
Despite regretting missing opportunities, the investor remains optimistic about Nvidia's future, especially its role in AI infrastructure. The most exciting part is that while the company's stock is still attractive, he is waiting for its price to drop before repurchasing it. However, as the stock remains expensive, Druckenmiller can only 'lick their wounds' from the missed opportunity, according to himself.
While Stanley Druckenmiller admits that he is a big believer in AI and sees enormous opportunities for Nvidia in this market segment, he still believes that the green company's stock could plunge, which is when it is time for him to buy.
The question is, if Nvidia's stock price drops from $136 per share to, say, $80–$95 per share, it would mean that over a trillion dollars will be erased from the company's market capitalization, and that would be a shock for the whole market. Such changes are unlikely to happen overnight, so Nvidia or the AI sector would need to underperform for a while before that could happen. That in turn raises doubts as to whether Stanley Druckenmiller or other investors would be interested in reinvesting in stocks and market segments that have underperformed.
