Nvidia sees yet another high profile exit after SoftBank as AI bubble concerns mount

Wall Street darling and the world's most valued company, Nvidia Corp. has seen another high profile exit as Peter Thiel's hedge fund sold its entire stake in the previous quarter.

Thiel Macro LLC, the hedge fund, disclosed that it sold its entire stake in the world's leading provider of AI chips during the third quarter. It offloaded 5,37,742 shares of Nvidia, which would have been worth $100 million, based on the closing price of September 30.

The fund also reduced its stake in Tesla Inc. during the quarter, but the Elon Musk-owned EV maker still features among the fund's top holdings, along with Apple and Microsoft, as per the 13F filing.

Thiel's exit from Nvidia comes on the heels of SoftBank also disclosing that it sold its entire remaining stake in Nvidia, worth nearly $6 billion, to fund its potential investments in OpenAI.

Concerns over the AI theme entering a bubble are now rife with Michael "the big short" Burry also disclosing short positions in both Nvidia and Palantir, the AI-powered software developer. The concerns have sent the Nasdaq, the tech-heavy index down by 5% from its record high levels, while the Tech sector within the S&P 500 is down 7% from the top.

Nvidia recently became the first company to cross $5 trillion in market capitalization. An analysis of 13F filings from 909 hedge funds by Bloomberg showed that 161 funds increased their positions, while an equal number (160) reduced them during the September quarter. The street is also jittery ahead of the third quarter results that Nvidia will be reporting on Wednesday, after the closing bell.

Shares of Nvidia fell 1.9% in regular trading on Monday and another 0.7% in extended trading. The stock is down 12% from its peak of ₹212.

(With Inputs From Agencies.)