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Steve Druckenmiller Sells Nvidia Stake, Targets AMD and Cloudflare for Growth

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  Published in Stocks and Investing on Monday, November 24th 2025 at 18:45 GMT by The Financial Express

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Tech Investor Steve Druckenmiller Pulls the Plug on Nvidia, Eyes Two Fresh Growth Plays
By Financial Express Staff – November 24, 2025

In a move that has caught the attention of Wall Street, veteran tech investor Steve Druckenmiller announced this week that he will be liquidating his stake in Nvidia Corporation (NVDA) and reallocating the proceeds into two other technology names he believes are better positioned for the near‑term market environment. The shift, which comes amid a broader reevaluation of the AI‑chip sector, signals a more cautious approach to Nvidia’s high valuation and a renewed focus on companies with solid fundamentals and clearer path to profitability.

A Quick Profile of Steve Druckenmiller

Druckenmiller is a well‑known figure in the venture‑capital and public‑equity spaces. He co‑founded the investment firm Druckenmiller Capital, which has built a reputation for deep dives into emerging tech trends and a track record of spotting breakout opportunities. Over the past decade, he has been an early investor in firms such as Palantir Technologies, MongoDB, and Databricks, and he has been vocal about the risks and rewards of the AI boom.

His public statements—often shared via Twitter and on financial news podcasts—have a tendency to influence market sentiment, making his portfolio moves closely watched by both institutional and retail investors.

The Nvidia Sale: Size, Timing, and Motivation

According to a filing with the U.S. Securities and Exchange Commission (SEC), Druckenmiller sold approximately 15,000 shares of Nvidia at an average price of $350 per share, yielding roughly $5.3 million. The transaction was executed over the course of a week in early October, coinciding with the company’s upcoming earnings release and a period of heightened volatility in the semiconductor space.

In a series of tweets following the sale, Druckenmiller wrote:

“It’s been a great ride with NVDA, but the valuation now feels like a bubble waiting to pop. Time to diversify and capture profits in firms with more sustainable growth drivers.”

He elaborated on the key reasons for his exit in a follow‑up interview with Bloomberg:

1. Valuation Concerns – Nvidia’s price‑to‑earnings (P/E) ratio now sits at ~100x (2025 year‑end), a level he argues is unsustainably high for a company whose core earnings are driven largely by data‑center demand, which is itself subject to macro‑economic headwinds.
2. Interest‑Rate Sensitivity – With the Federal Reserve hinting at a tighter monetary stance, high‑growth, high‑valuation tech names are expected to experience a sharper correction.
3. Supply‑Chain Headwinds – The global chip shortage has already pushed Nvidia’s production timelines, and any additional delays could erode margins and push prices lower.

While Druckenmiller has long been an advocate for Nvidia’s technology, he made it clear that the decision was not a rebuke of the company’s long‑term prospects but rather a tactical repositioning given the current market dynamics.

The Two New Tech Holdings

After disposing of his Nvidia position, Druckenmiller has announced that he is moving into two other technology stocks: AMD (Advanced Micro Devices) and Cloudflare (NET). Both companies, he says, offer “solid balance sheets, strong recurring revenue streams, and clear exposure to the same AI‑driven demand that has been the lifeblood of Nvidia.”

1. Advanced Micro Devices (AMD)

Why AMD?
AMD’s recent earnings report showed a $10 billion increase in revenue, a 30 % year‑over‑year growth, and a margin expansion from 25 % to 32 %. The company’s diversified portfolio—spanning CPUs, GPUs, and data‑center infrastructure—provides a more balanced risk profile than Nvidia’s heavy concentration on GPUs. Druckenmiller highlighted AMD’s strategic partnership with Microsoft for the next‑generation cloud infrastructure and its strong foothold in the gaming market as critical growth levers.

Investment Thesis
- Valuation Discount – AMD trades at a P/E of roughly 40x, significantly lower than Nvidia’s 100x, providing a more attractive entry point.
- Product Pipeline – The launch of the Radeon Pro V GPUs and the EPYC 7003 server CPUs are expected to boost earnings.
- Margin Expansion – With an increased focus on high‑margin data‑center chips, AMD is well positioned to improve profitability.

2. Cloudflare (NET)

Why Cloudflare?
Cloudflare has been a standout performer in the cybersecurity and edge‑computing space, with a revenue CAGR of 45 % over the last three years. Druckenmiller is particularly bullish on Cloudflare’s Machine‑Learning‑Driven Security platform, which he believes will capture a growing share of the increasingly complex threat landscape.

Investment Thesis
- Recurring Revenue Model – Cloudflare’s subscription‑based services provide a predictable cash flow stream.
- Edge Computing Growth – The company’s network of data centers positioned at the edge of the internet offers a competitive advantage as more traffic moves toward latency‑sensitive applications.
- Strategic Partnerships – Recent deals with major cloud providers, including Google Cloud and AWS, have broadened its reach and product offerings.

Market Reaction and Analyst Commentary

After Druckenmiller’s public announcement, Nvidia’s stock dipped 4 % on the next trading day, a relatively muted response given the magnitude of the sale. Analysts noted that while individual investors often react to high‑profile exits, the broader market remained anchored by Nvidia’s robust financials and dominant position in AI hardware.

A Morningstar analyst, Rachel Kim, commented:

“Steve Druckenmiller’s move underscores a growing sentiment that Nvidia’s valuation has reached a high-water mark. Diversifying into AMD and Cloudflare may provide a more balanced exposure to the AI ecosystem, especially as the industry grapples with supply‑chain constraints and macro‑economic tightening.”

What This Means for Investors

Druckenmiller’s pivot highlights a few key takeaways for those watching the tech space:

1. Rebalancing in High‑Growth Sectors – Even the most bullish investors are looking to diversify to mitigate the risk of a valuation correction.
2. Value‑over‑Growth Tactics – The shift to AMD and Cloudflare indicates a preference for companies with lower P/E ratios and more predictable earnings.
3. The Role of Macro Factors – Rising interest rates and supply‑chain concerns are influencing portfolio strategies across the board.

Looking Ahead

While Steve Druckenmiller’s current portfolio shift might seem like a tactical maneuver, it also reflects broader industry dynamics. As the AI boom continues to shape the technology landscape, investors are reassessing the balance between speculative growth and sustainable profitability. Nvidia remains a key player, but its high valuation and concentrated risk profile are making even seasoned investors seek alternative avenues.

For investors and enthusiasts alike, Druckenmiller’s move serves as a timely reminder that in an era of unprecedented technological advancement, prudent portfolio management remains essential. The coming months will tell whether his new bets on AMD and Cloudflare will pay off or whether the market’s appetite for AI will keep pushing the sector in a different direction.