Peter Thiel's hedge fund sold off entire Nvidia stake in third quarter

By Vlad Savov and Tom Metcalf

 

Peter Thiel’s hedge fund Thiel Macro LLC sold off its holdings in Nvidia Corp. during the third quarter, marking another retreat from the leading provider of artificial-intelligence chips.

 

The fund offloaded its entire position of 537,742 shares in the world’s premier AI chipmaker, which would have been worth about $100 million based on the closing price from Sept. 30. The Thiel Macro fund now counts Apple Inc., Microsoft Corp. and a reduced stake in Tesla Inc. as its main bets, according to a 13F filing.

 

Thiel’s move comes at a time of rising concerns about an AI investment bubble, which turned Nvidia into the world’s most valuable company. Hedge fund manager Michael Burry has been perhaps the highest profile critic, disclosing bearish wagers against Nvidia and Palantir Technologies Inc.

 

Japan’s SoftBank Group Corp. also announced it sold off its shares in Nvidia in October for $5.83 billion, largely to help finance other AI investments. Thiel has been less bullish on AI development than SoftBank founder Masayoshi Son, but both men opted to exit their holdings around the time that Nvidia became the first company to breach a $5 trillion valuation.

 

Nvidia’s shares, which are up just roughly 2% since the end of September, slid about 1% in pre-market US trading. An analysis of 13F filings from 909 hedge funds found an even split of investor sentiment on the chipmaker: 161 increased their investment positions in Nvidia, while 160 decreased them during the three months to September. Opinions remain divided about the prospects for AI companies, which continue to raise and spend funds at elevated rates but have yet to demonstrate monetization models that would pay off the lofty investments.

 

Peter Thiel did not immediately respond to an email and a messaged request for comment outside regular business hours.

 

Thiel has also backed a US-based startup named Substrate, which aspires to compete in AI semiconductor production, as well as AI startups Mercor and Cognition AI, among his various venture capital bets.

 

Burry’s Scion Asset Management disclosed this month that it had bought put options on Nvidia and Palantir, positions that would benefit from declines in the stock prices. Burry, who rose to fame for his 2008 bet against the US housing market, also posted a cryptic message on X: “sometimes, we see bubbles.”

 

Burry later took issue with the accounting practices of hyperscalers — the companies that buy Nvidia chips — including Microsoft Corp. and Alphabet Inc. He pointed out that they have extended depreciation schedules for their investments in recent years, helping cut expenses and boost profits.