Here are other AI stocks vulnerable to profit taking as Druckenmiller sells some Nvidia
Billionaire investors have begun cashing in on their Nvidia bets as the stock rockets toward new highs. But the chipmaking darling is far from the only artificial intelligence stock that’s run too far too fast. Stanley Druckenmiller told CNBC’s ” Squawk Box ” on Tuesday that he trimmed his Nvidia stake in late March, saying that the stock’s become a “little overhyped” in the short term. Elsewhere, Altimeter’s Brad Gerstner eased his stake in the chipmaker and other winning technology stocks, he told CNBC’s ” Halftime Report .” “We did cut that and a lot of other positions in late March,” Druckenmiller said. “I just need a break. We’ve had a hell of a run. A lot of what we recognized has become recognized by the marketplace now.” The legendary hedge fund manager is still bullish on AI long-term. Nvidia isn’t the only AI play vulnerable to profit taking here. To find some of the other names that have run too far too fast, CNBC Pro screened to look for AI-related companies with a forward price-to-earnings trading at a 25%-plus premium to the average forward PE over the last 5 years. We also screened for stocks up more than 50% since the bull market began in the fourth quarter of 2023. Here are some of the companies that made the cut: Several popular chipmaking stocks met the criteria. That includes Nvidia opponent Advanced Micro Devices . Shares have jumped more than 51% since October 2023 and trade at a 26% premium to their average PE over the last five years at more than 44 times. Of the group, Micron Technology shares trade at the most significant premium. The memory chipmaker currently trades at a PE of 149 times, or a more than 700% premium to its 5-year average of about 19 times. Other chipmakers that made the list include Arm Holdings and Broadcom . Arm shares have nearly doubled since October 2023 and trade at a 43% premium to their five-year average. The SoftBank-backed British chip company went public in September. Broadcom’s rallied about 58% in that timeframe. SMCI 1Y mountain Shares over the last year Super Micro Computer has experienced the most significant run of the group. Shares of the high-flying AI company have rallied about 203% since October as investors bet on its servers. Over the last year, shares have surged 493% and trade at a 185% premium to their five-year average PE. Arista Networks , Applied Materials and KLA Corporation also met the criteria.
