After the tremendous rise in Artificial Intelligence (AI) stocks, the fears of the bubble bursting seem to be increasing. Meanwhile, big news has come that Thiel Macro LLC, the hedge fund company of American billionaire and tech investor Peter Thiel, sold its entire stake in Nvidia during the September quarter.
Thill Macro has sold all the 5,37,742 shares of Nvidia he holds. According to the closing price of September 30, their value is around 100 million dollars (about Rs 830 crore). After this selloff, Thill Macro’s biggest bet is now on the shares of Apple, Microsoft and Tesla.
Growing concern about AI bubble
Veteran hedge fund manager Michael Burry has also bet against AI companies like Nvidia and Palantir. “Sometimes we see bubbles,” he wrote in a recent post. Michael Burry is best known for correctly identifying the housing crash of 2008, which led to the global recession.
SoftBank also exited Nvidia
Japan’s leading investment firm SoftBank Group also sold its stake in Nvidia in October for about $5.83 billion. This fund was used to raise funds for other AI investments.
However, Peter Thill has never been as bullish on AI as SoftBank founder Masayoshi Son. But both investors have sold their stakes around Nvidia’s $5 trillion valuation level.
Hedge funds’ opinions divided
However, the opinion of the rest of the Fed Funds seems to be mixed. During the month of September, 161 out of 909 hedge funds increased investments in Nvidia. And 160 firms reduced investment. That means the market opinion is currently divided on this stock. AI companies are still raising funds vigorously, spending money rapidly, but their clear monetization models do not appear to be as strong.
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