Peter Thiel Sells Off Entire Nvidia Stake Amid AI Bubble Fears

Billionaire investor also cuts Tesla holdings and raises exposure to Apple and Microsoft as tech sector valuations come under scrutiny

Billionaire investor and tech entrepreneur Peter Thiel has sold his entire stake in Nvidia, triggering renewed speculation about a potential AI-driven market bubble. This dramatic move comes as concerns grow over the sustainability of sky-high tech valuations and rising capital expenditure across the AI sector.

Thiel Dumps Nvidia in $100 Million Move

According to recent regulatory filings, Thiel sold 537,742 shares in Nvidia (NASDAQ: NVDA) during the third quarter, with the value of the sale estimated at around $100 million, based on the average trading price during the period.

The disclosure, made via a Form 13F filing by his investment vehicle Thiel Macro, confirms that Thiel held zero Nvidia shares by 30 September 2025.

This decision places him in the company of other high-profile investors such as SoftBank and Michael Burry, both of whom have recently reduced or shorted their exposure to AI-related stocks like Nvidia and Palantir Technologies.

Portfolio Reshuffle: Cuts in Tesla, Buys in Apple and Microsoft

In addition to exiting Nvidia, Thiel has:

• Reduced his Tesla holdings from 272,613 shares to just 65,000.
• Completely sold his position in Vistra Energy Corp (NYSE: VST), where he previously held 208,747 shares.
• Increased his holdings in Apple (NASDAQ: AAPL) by purchasing 79,181 shares.
• Added 49,000 shares of Microsoft (NASDAQ: MSFT).

These moves suggest a shift in focus towards more traditionally stable tech giants, potentially signalling a strategy to weather increasing market volatility.

Why the Concern Over an AI Bubble?

Thiel has long warned of overinflated tech valuations, drawing parallels to the 1999–2000 dot-com crash. His recent actions come amid growing concern that AI companies like OpenAI may be facing unsustainable spending commitments, reportedly exceeding $1 trillion.

Such spending raises eyebrows not only about profitability but also about circular financing — where firms like Nvidia invest in clients like OpenAI that then purchase hardware and services from Nvidia itself.

Investor Sentiment Sours on AI-Fuelled Rally

There is growing unease among investors as several tech firms ramp up capital spending, particularly on AI infrastructure. This trend, while aimed at future growth, has raised red flags about whether current valuations are justified.

Recent earnings from megacap tech firms suggest increased capital expenditure without corresponding short-term profit growth, which has already begun to put downward pressure on share prices of overvalued stocks.

Potential Market Impact

• Nvidia's share price could experience continued volatility, especially if more institutional investors follow Thiel’s lead.
• The tech sector may see sector rotation, with investors moving funds from high-growth, high-risk assets into safer blue-chip names.
• If confidence in AI profitability weakens, AI-related stocks like Palantir, C3.ai, and AMD could also face valuation corrections.
• Tesla's stock, already under pressure from margin concerns and increasing competition, may take another hit with Thiel's reduction.

Conclusion

Peter Thiel’s divestment from Nvidia and Tesla suggests mounting concern over AI-related market exuberance. As valuations climb to extreme levels, influential investors like Thiel are choosing to de-risk by moving into more established tech stocks like Apple and Microsoft.

This shift may serve as a warning for retail and institutional investors alike, encouraging a reassessment of risk exposure in portfolios dominated by AI and high-growth technology firms.

With more influential names backing out of AI-heavy plays, the tech rally may be entering a more cautious phase, where sustainable growth trumps speculative excitement.

Sources  (Investing.com, SKY.com)