Why some elite investors are turning on the darling of the AI rally

Nvidia shares fell Monday amid AI bubble jitters on Wall Street. – Thibaud Moritz/AFP/Getty Images

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Three prominent investors with almost nothing in common are dumping their shares of Nvidia, the computer chip juggernaut that went from relative obscurity to the world’s first $5 trillion valuation in just three years.

It’s hard to overstate Nvidia’s superlatives. On its own it makes up 8% of the total value of the S&P 500. Its annual net income grew more than 580% between 2023 and 2024. It’s become almost a joke on Wall Street that the company consistently blows past expectations, notching quarter after quarter of financial gains, thanks to seemingly bottomless demand for Nvidia’s sophisticated chips, which are key to building artificial intelligence models like OpenAI’s ChatGPT or Anthropic’s Claude.

So why sell now? Isn’t betting against Nvidia now a bit like betting against the 1995 Bulls? (As in, you’d be out of your mind to do so)?

Maybe not. There are any number of reasons why investors would sell Nvidia, but the timing of these recent moves is fueling concerns that the company — and by extension, the entire AI industry — is part of a speculative bubble that’s bound to burst.

On Monday, a regulatory filing showed tech billionaire Peter Thiel’s hedge fund had, sometime in the three months ending in September, sold its entire stake in Nvidia — all 537,742 shares, which would be worth about $100 million as of September 30, the last day of the quarter. The disclosure, three days ahead of Nvidia’s upcoming earnings release, rattled investors, who are already nervous about when, or whether, they’ll see a return on their AI investments.

Thiel’s revelation came days after Japanese conglomerate SoftBank said it had sold all of its Nvidia holdings for $5.8 billion. And earlier this month, Michael Burry — the “Big…

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