TLDR
- Nvidia stock declined 1.2% to $187.95 in Monday premarket trading
- Billionaire Peter Thiel’s Thiel Macro fund eliminated its entire 537,742 share position in Q3
- The position was valued at approximately $100 million as of September 30
- Analysts project $1.23 EPS on $54.83 billion revenue when Nvidia reports Wednesday earnings
- D.A. Davidson maintains Buy rating with $250 price target citing strong compute demand
Nvidia shares slipped Monday morning after regulatory filings revealed Peter Thiel’s hedge fund completely dumped its position in the AI chipmaker. The stock traded down 1.2% at $187.95 in premarket hours.
Thiel Macro LLC’s 13F filing disclosed the fund sold all 537,742 Nvidia shares during the third quarter. The position carried a value near $100 million based on September 30’s closing price.
The exit comes just days before Nvidia’s highly anticipated earnings report scheduled for Wednesday after market close. Analysts expect the company to post adjusted earnings of $1.23 per share on revenue of $54.83 billion for the October quarter.
Wall Street Stays Confident
Despite Thiel’s exit, analysts maintain positive outlooks on the chipmaker. D.A. Davidson’s Gil Luria reaffirmed his Buy rating with a $250 price target.
Luria highlighted robust demand trends across multiple customer categories. “We see no reason to believe that demand is slowing down,” he stated in a recent note. The analyst suggests the market underestimates future compute demand.
Thiel’s move mirrors SoftBank Group’s October decision to offload Nvidia shares worth $5.83 billion. Both high-profile exits raise questions about AI sector valuations.
Hedge Fund Community Divided
Data from 909 hedge fund 13F filings shows investor opinion split down the middle. In Q3, 161 funds boosted their Nvidia holdings while 160 reduced positions.
This division reflects ongoing debate about AI company valuations. These businesses spend heavily but haven’t demonstrated clear paths to returns that justify massive investments.
Nvidia has gained just 2% since September ended. The stock did rally 1.8% Friday as buyers stepped in to reverse earlier session losses.
Thiel Repositions Portfolio
Thiel Macro’s filing shows Apple, Microsoft, and a trimmed Tesla position now anchor the fund’s holdings. Through venture investments, Thiel backs Substrate, a US-based Nvidia rival, plus AI startups Mercor and Cognition AI.
The billionaire has expressed less enthusiasm about AI development compared to SoftBank founder Masayoshi Son. Both chose to exit their positions in the world’s most valuable company during the same period.
Other semiconductor stocks showed mixed Monday movement. Advanced Micro Devices dropped 0.3% in premarket trading. Broadcom held relatively steady.
The complete liquidation happened before the current quarter started, positioning Thiel Macro differently from many peers ahead of Wednesday’s results. Nvidia’s earnings will provide fresh insight into AI chip demand and revenue growth trajectories.
Market participants will watch closely for guidance on future quarters when the company reports. Management commentary could either validate analyst optimism or support concerns that drove recent high-profile exits.
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