With the latest round of 13F forms out, we have some new insights into what stocks are in the portfolios of billionaire hedge fund managers. One fund I follow is Third Point, run by billionaire Daniel Loeb. During the fourth quarter, he made some interesting moves, selling Amazon (AMZN 1.31%) and Microsoft (MSFT 0.28%). However, he didn't just sit on a pile of cash. He added to his position in another stock that has been on a huge run over the past few years.
The stock is up more than 1,200% since 2023, and it's none other than Nvidia (NVDA 1.27%).
This is another vote of confidence for Nvidia -- a stock that has been leading the markets for some time.
However, the "new" information we have on Loeb's activities is at least two months old now, as his latest disclosure shows a snapshot of his investments on Dec. 31. The sales and purchases it reflects could have occurred anytime between Oct. 1 and Dec. 31. So, are Amazon and Microsoft still sells, and is Nvidia still a buy?
Image source: Getty Images.
Third Point didn't completely exit its Microsoft and Amazon positions
Loeb didn't come close to selling all of his shares of Amazon and Microsoft; they are still the third- and fourth-largest positions in Third Point's portfolio, with each making up over 6% of its assets. Still, he sold 23% of his Amazon stake and 16% of his stake in Microsoft during Q4.
There are a lot of reasons that an investor might decide to sell a stock, including finding other investment opportunities that they view as more promising. Some of the proceeds from the sales could have gone toward his purchase of Nvidia stock. Regardless, I don't think retail investors need to be dumping shares of Microsoft or Amazon anytime soon.
NASDAQ: MSFT
Key Data Points
Both companies are doing quite well, and their latest quarterly reports showcased solid growth. However, each stock has had a rough 2026 so far, and both are now cheaper than they were at any time in the fourth quarter. This raises the question: Are these stocks buys now?
I think Microsoft has the better buy case of the two. It posted 17% year-over-year growth in its latest quarter and reported huge cloud computing growth as well as a revenue backlog spanning multiple years. Amazon also reported strong figures, and its cloud computing division reported its best quarter in over three years. However, on a forward earnings basis, Microsoft's stock is a fair bit cheaper than Amazon's.
MSFT PE Ratio (Forward) data by YCharts.
I think this gives Microsoft stock the edge as the better buy, although I don't think there's any reason to sell as Loeb did.
On the other hand, Nvidia is still a better buy than either of them.
Nvidia continues to dominate
Nvidia is a truly remarkable company. Its graphics processing units (GPUs) have become the primary computing unit for AI, and their dominance is nothing short of incredible. High demand for its processors has resulted in outsized growth for multiple years, and it doesn't look as if 2026 will be any different.
NASDAQ: NVDA
Key Data Points
The AI hyperscalers have guided for $650 billion in data center capital expenditures this year, and Nvidia will get a healthy slice of that massive figure. Furthermore, Nvidia just crushed its latest quarterly results, with revenue coming in at $68.1 billion, up 73% year over year. Nvidia had previously told investors to expect $65 billion for the quarter, so this was a sizable beat.
Yet even though Nvidia continues to grow at a rapid pace and crush expectations, its price tag really isn't all that high on a forward earnings basis.
NVDA PE Ratio (Forward) data by YCharts.
Trading at 25 times expected forward earnings, Nvidia is near the cheapest level it has been over the past three years, so it's clearly still a strong buy. I think investors could comfortably follow in Loeb's footsteps and scoop up shares of Nvidia today, although I'd consider buying Amazon and Microsoft stock as well.
