Few data releases on Wall Street hold more bearing than the quarterly filing of Form 13Fs with the Securities and Exchange Commission. A 13F provides investors with a concise snapshot of the stocks that Wall Street's savviest fund managers bought and sold in the most recent quarter. In other words, it tips investors off to the companies and trends piquing the interest of the market's most successful investors.
The latest round of 13Fs (filed Feb. 17) tells quite the story in the artificial intelligence (AI) arena. Seven preeminent billionaire money managers were sellers of Meta Platforms' (META 2.41%) stock, while several of these sellers were also buyers of a new-favorite AI company -- and I'm not talking about Nvidia.
Image source: Getty Images.
Making sense of the fourth-quarter exodus out of Meta Platforms
According to 13Fs, seven high-profile billionaire investors pared down or completely jettisoned their fund's respective stakes in social media maven Meta Platforms during the fourth quarter:
- Philippe Laffont of Coatue Management: 253,768 shares sold
- Stephen Mandel of Lone Pine Capital: 1,322,260 shares sold
- Stanley Druckenmiller of Duquesne Family Office: 76,100 shares sold
- Terry Smith of Fundsmith: 195,125 shares sold
- Dan Loeb of Third Point: 220,000 shares sold
- Chase Coleman of Tiger Global Management: 68,386 shares sold
- Ole Andreas Halvorsen of Viking Global Investors: 929,003 shares sold
NASDAQ: META
Key Data Points
Profit-taking is a logical explanation for some of this selling. Between April and October, Meta's shares rose by roughly 50%. However, profit-taking probably isn't the whole story.
Meta Platforms' third-quarter operating results featured yet another capital expenditures (capex) forecast increase tied to the company's AI Superintelligence Lab. CEO Mark Zuckerberg is sparing no expense to ensure his company is well-positioned for an AI-driven future.
The concern is that higher capex for AI can potentially weigh on short-term profits. Historically, Zuckerberg waits years before monetizing his company's premier initiatives. Then again, Meta's CEO has a time-tested track record of generating profits.
Image source: Getty Images.
Billionaire investors seemingly have a new favorite AI stock
At the same time that high-profile billionaires were selling their stakes in Meta, some were piling into what appears to be their new favorite AI stock, Taiwan Semiconductor Manufacturing (TSM 4.44%)(also known as "TSMC"):
- Philippe Laffont of Coatue Management: 556,988 shares purchased
- Ole Andreas Halvorsen of Viking Global Investors: 970,530 shares purchased
- David Tepper of Appaloosa: 70,000 shares purchased
TSMC is also the new largest holding for Stephen Mandel of Lone Pine Capital, though no new shares were added in the fourth quarter.
NYSE: TSM
Key Data Points
Billionaire fund managers clearly appreciate TSMC's unique positioning as the world's leading chip fabricator amid the AI boom. The insatiable demand for graphics processing units, coupled with their short supply, has led to a sizable backlog and significant pricing power for Taiwan Semiconductor.
But even amid this AI hoopla, TSMC remains a major player in chip fabrication for wireless chips used in smartphones, as well as Internet of Things devices and next-generation vehicles. While these other segments don't offer the breakneck growth potential of advanced AI chips, they provide steady cash flow for Taiwan Semiconductor and a solid foundation for its stock.
