Peter Thiel sells entire Nvidia stake amid AI bubble fears

Billionaire Peter Thiel has offloaded his entire stake in leading chipmaker Nvidia, according to recent regulatory filings, amid concerns over an artificial intelligence-fuelled bubble in technology stocks.

The 13F filings by Thiel Macro LLC show that the fund sold all the 537,742 Nvidia shares it held during the July-September quarter. This position accounted for 40% of the fund's portfolio.

The fund also sold its entire stake — 208,747 shares — in US-based energy company Vista Corp, wiping another 19% off its portfolio.

The exits shrank the fund's equity book to $74.4 million, from $212 million in the April-May quarter. EV maker Tesla now accounts for the largest chunk of the fund's portfolio at nearly 39%.

AI bubble fears

While the reason behind Thiel's sale of Nvidia shares was not immediately known, concerns have been raised around the stock despite its stellar run.

Nvidia became the world's first $5-trillion company in October. As of its last close, the counter is up around 36% for the trailing 12-month period and 37.5% in the year to date. This comes on the back of a 56% rise in sales to $46.7 billion, driven by data centre revenue increasing at the same pace to $41.1 billion.

The AI chip company expects to sustain revenue growth in the third quarter of fiscal year 2026, with revenue projected at around $54 billion with a 2% tolerance range.

However, there are concerns over circular deals in the AI space artificially inflating the values of technology stocks. One such deal involves a $10 billion transaction between Nvidia and OpenAI, where Sam Altman's AI major will use the funds to buy GPUs from the Jensen Huang-led chipmaker.

Also Read: Doomsday or new dawn: what will Nvidia, OpenAI's circular dealmaking bring

Michael Burry, known for successfully betting against the US housing market in 2008, has also made bearish bets against AI companies. Among them are put options linked to around 1 million Nvidia shares.

Burry has argued that as companies such as Microsoft, Alphabet-owned Google, Oracle and Meta pour billions into Nvidia chips and servers, they are also quietly stretching out depreciation schedules to make earnings look smoother.

In a surprise move last week, Japanese tech investment firm SoftBank sold its entire stake in Nvidia for $5.8 billion to redirect funds into OpenAI. Notably, both OpenAI and SoftBank are partners with Oracle in the AI infrastructure project, Stargate.

Also Read: Michael Burry of 'Big Short' fame deregisters Scion Asset Management

Source: EconomicTimes
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