Billionaire Stanley Druckenmiller sells Nvidia, buys Broadcom, suggesting possible concerns with Nvidia

From Nasdaq: 2024-12-26 04:30:00

Nvidia (NASDAQ: NVDA) has driven the AI boom with ChatGPT, leading to an 895% stock price increase. 92% of analysts rate it a buy, with a median target price of $175 per share, indicating 30% upside. However, billionaire Stanley Druckenmiller sold his stake, shifting to Broadcom (NASDAQ: AVGO) post a stock split.

Druckenmiller previously held 14% of his portfolio in Nvidia, making it his top position. Now, he has no Nvidia exposure but holds shares in Broadcom. Nvidia’s GPUs dominate the AI accelerator market, with over 80% market share, and offer a full-stack approach with superior data center systems.

Nvidia reported a 94% revenue increase in Q3 of fiscal 2025, with data center sales up 112% and automotive/robotics up 72%. Non-GAAP earnings doubled to $0.81 per diluted share. Wall Street expects a 50% increase in adjusted earnings in the next four quarters, making the current valuation of 52 times adjusted earnings appear attractive.

Broadcom, known for semiconductors and infrastructure software, reported a 51% revenue increase in Q4 of fiscal 2024. Non-GAAP earnings rose to $1.42 per diluted share. The company forecasts significant AI chip sales growth, with sales to hyperscale customers expected to increase fivefold in the next three years.

Broadcom also anticipates adding major customers like Apple and OpenAI, leading to substantial AI sales growth. Wall Street projects a 30% increase in Broadcom’s adjusted earnings in the next four quarters, with a current valuation of 46 times adjusted earnings. Consider investing in both Nvidia and Broadcom for potential gains.



Read more at Nasdaq: Billionaire Stanley Druckenmiller Sells Nvidia Stock and Buys Another Stock-Split AI Stock. Does He Know Something Wall Street Doesn’t?