Investing

Billionaires Selling AI Stocks to Buy This ETF that Has 42% Upside According to Wall Street Guru

Vandita Jadeja

Published: January 27, 2025 1:35 pm

Investing in the tech sector can be rewarding and risky at the same time. You could have a year like 2021 when tech stocks tumbled, followed by 2023 where they saw highs like never before. But the sector has shown resilience and bounced back from the lows. With the growing popularity and adoption of artificial intelligence, you must cherry-pick stocks to ensure that you are putting your money in the right basket. However, famous billionaires are looking at ways to diversify their investments while reducing risk. 

Key points in this article:

• Billionaire investors are selling top AI stocks to invest in ETFs.
• Bitcoin is steadily moving upwards and there is bullishness around it.
• If you are looking for the next Nvidia before anybody else discovers it, get your hands on our free copy of the brand-new “The Next NVIDIA” report. The stock has the potential to generate 10x returns.

A hot property at one time, artificial intelligence stocks have generated huge returns for investors. Those who identified and invested in Nvidia Corp. (NASDAQ: NVDA) before it became a rage, have already taken home giant gains. However, AI stocks are not the same today. The market is uncertain, competition is growing, there is high volatility driven by the ongoing earnings season and investors are looking to build a diversified portfolio.

• Millennium Management cut down its position in Nvidia by 12.5% in the most recent quarter and invested $849 million in the ETF. The fund has poured about $2 billion in bitcoin ETFs. 
• Capula Management reduced the stake in Nvidia by 27.7% in the third quarter and put $308 million in the ETF.
• Apart from them, Steven Schonfeld of Schonfled Strategic Advisors invested $195 million while Sculptor Capital also invested $195 million in the ishares Bitcoin Trust.

Does this mean retail investors should also jump into the ETF pool? Let’s get into the details.

Transition towards ETFs

Trading at $78, Palantir stock is up 378% in the past year and the AI company is on a solid run. The big data company has seen huge investor interest as companies continue to increase their investments in AI. Its AIP is one of the most popular products that can be used across multiple industries. Many investors think the stock is trading at a premium and the market bullishness has given it a high valuation. Future growth is already baked in its valuation. Several are also of the opinion that Palantir could see a pullback after it announces results in February. 

Nvidia, on the other hand, has been growing at a rapid rate but, it also faces stiff competition from other chipmakers, export concerns against China, and companies reducing their spending on AI. Trading at $147, Nvidia stock is up 139% in the past year and many investors believe that it has had its run. 

Investing in an ETF can reduce risk while building a diversified portfolio. I think the investors believe that both the AI stocks have peaked and are making timely exits. We’ll have to wait and watch how things pan out.

Wall Street is optimistic on Bitcoin

Investors prefer ETFs in uncertain times since they reduce the risk and provide a basket of stocks to invest in. iShares Bitcoin Trust allows investors to invest in Bitcoin without acquiring it directly. It is an ideal instrument for those looking to invest in Bitcoin right now. Trading for $99,000, Bitcoin has been steadily rising over the past six months and the decision to transfer money from AI stocks to the ETF is a smart move. Bitcoin has soared over 100% in the past year which has attracted new investors. 

Cathie Wood expects bitcoin price to hit $3.8 million by the end of this decade and if that happens, ETFs could soar to new highs. Further, analyst James Check predicts the price to hit a peak of $150,000. But he also adds that once Bitcoin reaches this price, it will struggle to hold there. Standard Chartered predicts it will hit $200,000 by the end of 2025. 

As compared to any other cryptocurrency, Bitcoin is one of the strongest and it has the potential to impact the entire industry. While the predictions about Bitcoin should always be taken with a grain of salt, investors should be aware of the risks it carries. There is strong bullishness around Bitcoin and it has already survived for a decade, making investors believe that it can continue thriving in the years to come.