Billionaire Dan Loeb Sold Shares of AI Leaders Including Amazon, Microsoft, and Meta and Added to His Position in This AI Player That’s Soared 453,000% Since Its IPO

Four times a year, investors get a golden opportunity: The chance to check out the latest investing moves of experts. How does this happen? Managers of more than $100 million in securities must file their latest trades on Form 13F with the Securities and Exchange Commission. These forms are available to the public, allowing any of us to take a peek — and potentially gain investing inspiration.

In the latest quarter, billionaire Dan Loeb made a striking move, selling shares of several artificial intelligence (AI) leaders — but adding to his position in a key AI stock, one that’s soared about 453,000% since its initial public offering. Clearly, Loeb thinks this winning player has more room to run, even after such extraordinary gains. Let’s take a closer look at the AI moves of this investing giant.

AI stocks encounter turbulence

First, though, it’s important to consider the general market environment when Loeb made these moves. This concerns the fourth quarter of last year, and early in that period, AI stocks, the players that have been driving stock market gains, continued to climb — but by the middle of the quarter, concerns mounted regarding the high valuations of AI stocks and the possibility of a bubble taking shape. And that resulted in declines in many of these stocks in November.

Loeb, who oversees $7.2 billion in 13F securities at Third Point, invests significantly in technology stocks, with these players in three of the top five positions in his fund. Technology stocks also have been among his biggest investment areas over the past year.

Now, let’s check out the moves Loeb made in the fourth quarter.

• Loeb closed his position in Meta Platforms (META 3.77%), a stock he had held since the third quarter of 2023. In the third quarter of last year, it accounted for 1.8% of the portfolio.
• The billionaire reduced his Amazon (AMZN 0.87%) holding by 22%. It’s still a major position, though, ranked No. 3 with a 6.8% weight in the portfolio. He’s held the stock since the second quarter of 2023.
• Loeb cut his position in Microsoft (MSFT 1.57%) by 15%. This stock, too, remains a significant holding with a weight of 6.1%. It’s the fourth-biggest holding and has been part of the portfolio since the fourth quarter of 2022.
• The investing giant added to his Nvidia (NVDA 1.56%) position, increasing it by just under 4%. It now represents more than 7% of the portfolio and is Loeb’s second-biggest holding. He’s owned the stock since the first quarter of last year.

A stock well-positioned for growth

We don’t know the exact reasons behind Loeb’s moves, but it’s clear that he believes Nvidia may have further to go, even after its massive gains since its 1999 IPO, and is well-positioned to benefit from the current and next stages of AI growth.

It’s important to remember that, as the infrastructure build-out stage unfolds, Nvidia should continue to see explosive demand. This spending, which the company forecasts may reach $4 trillion by the end of the decade, will power the ramp-up of data centers, and a key element here is the AI chip. And that’s fantastic news for Nvidia, which, as the AI chip leader, sells the world’s most powerful graphics processing units (GPUs).

And this market giant also should benefit as these data centers open up capacity, as customers will need the best and latest chips to power the application of AI to real-world problems. For example, GPUs are needed for inference, or the “thinking” process a model uses to do its job.

Meanwhile, Loeb hasn’t given up on Amazon and Microsoft, leading cloud providers that should generate growth over the long term as customers rush to them for their AI projects. At these cloud providers, customers can find Nvidia products as well as a broad range of other AI products and services.

As for Meta, the stock climbed about 140% while it was in Loeb’s portfolio, and though it may have room to run, some investors have worried about the company’s aggressive spending on AI.

In any case, Loeb’s moves in the quarter show ongoing commitment to the AI story, and if the billionaire is right, many AI stocks still could have plenty of room to run over time.