Stanley Druckenmiller says Nvidia stock is worth holding for the next few years amid AI bullishness
REUTERS/Brendan McDermid
- Nvidia is worth holding for two to three years, Stanley Druckenmiller said in a Bloomberg conference.
- His bullishness comes as other investors have called Nvidia overvalued.
- Druckenmiller previously revealed investments in Nvidia and Microsoft.
Billionaire investor Stanley Druckenmiller plans to hold on to Nvidia stock for at least the near future as the chipmaker is exposed to an artificial intelligence trend could be as "transformative as the internet."
His bullishness comes as other investors have called Nvidia overvalued after it briefly soared to a market cap of $1 trillion last month.
Speaking at the Bloomberg Invest conference on Wednesday, the Duquesne Family Office founder said that he'd hold the firm's stock for the next few years.
"If [AI is] as big as I think it is, Nvidia is something we're going to want to own for at least two or three years, not for 10 months," he said, adding "And maybe longer."
Nvidia has emerged as a critical enabler of the AI boom. Bank of America has called it the "picks and shovels leader in the AI gold rush" as the company virtually controls the market for graphics-processing chips that power generative AI chatbots like ChatGPT and Bard.
While Nvidia's valuation is just below $1 trillion, shares have still soared more than 160% in the year to date.
During the Bloomberg interview, Druckenmiller also noted that even if a hard landing for the economy affects some AI development, he expects Nvidia to thrive in the long run.
"History has proven that if you have very good earnings in a recession, and they're sustainable — if they're not, the market somehow figures it out — those stocks will do just fine," he said.
The investor has already placed a bet on Nvidia. In the first quarter, his family office snapped up $220 million worth of the chipmaker's stock. That's alongside $210 million in shares of Microsoft, which is an investor in ChatGPT parent OpenAI and has incorporated the technology into its Bing web browser.
But not everyone is convinced about Nvidia. ARK Invest CEO Cathie Wood and finance professor Asmath Damodaran have said shares are overvalued.
Still, AI adoption throughout the economy may propel the S&P 500 by up to 14%, Goldman Sachs wrote in a Monday forecast.