Billionaire Stanley Druckenmiller Sold 88% of Duquesne's Stake in Nvidia and Is Piling Into 2 Unstoppable Stocks

Important data releases aren't hard to come by on Wall Street. Monthly employment and inflation reports, coupled with earnings season (i.e., six weeks packed full of operating results from public companies), can make it easy for important data to fly under the radar.

While most investors were focused on the heart of earnings season in mid-August, as well as the release of the July inflation report, they may have missed the deadline for Wall Street's smartest and most-successful money managers to file their Form 13F with the Securities and Exchange Commission. A 13F provides a clear snapshot of which stocks and exchange-traded funds (ETFs) the top money managers purchased and sold in the latest quarter.

What's particularly noteworthy about the latest round of 13Fs is that Wall Street's hottest artificial intelligence (AI) stock, Nvidia (NASDAQ: NVDA), was sent to the chopping block by at least seven billionaire asset managers for the third consecutive quarter.

Perhaps the most prominent seller was billionaire Stanley Druckenmiller of Duquesne Family Office.

Stanley Druckenmiller slashed his fund's stake in Nvidia

Druckenmiller tends to minimize risks when investing and attempts to align his portfolio with the health of the U.S. and global economy. During the second quarter, a number of tech stocks were pared down or sold in their entirety by Duquesne's investment team, including Nvidia. The 1,545.370 shares sold by Druckenmiller reduced his fund's stake in Wall Street's AI darling by roughly 88% to just 214,060 shares.

On the bright side, Nvidia has maintained its monopoly like status as the preferred provider of AI-graphics processing units (GPUs) used in high-compute data centers. The analysts at TechInsights pegged Nvidia's share of GPUs shipped to enterprise data centers at 98% in 2022 and 2023. Given the persistently strong demand for the H100 and next-generation Blackwell chip, Nvidia seems unlikely to cede its top spot anytime soon.

But there's another side to Nvidia's growth story that unabashed optimists and Wall Street may be overlooking.

To begin with, there hasn't been a game-changing innovation for three decades that's avoided a bubble-bursting event early in its existence. In simpler terms, investors have consistently overestimated how quickly a new technology or innovation would become mainstream with consumers and/or businesses. The fact that most companies lack a well-defined game plan to generate a positive return on their AI investments is a strong clue that we're in the early stages of what's likely another bubble-bursting event.