Billionaire Philippe Laffont Just Sold 15% of Coatue's Tesla Stake and More Than Doubled His Position in One of Wall Street's Cheapest Artificial Intelligence (AI) Stocks

In Form 13F filings due Nov. 14, Philippe Laffont’s Coatue (about $41bn AUM as of Sept. 30) trimmed its Tesla position by roughly 15% in the September quarter — part of a broader liquidation of more than 3.12 million shares (about 64% of the position since March 31, 2023) — while increasing its Alibaba stake by roughly 130% (adding ~1.13m shares). The moves reflect both profit-taking after Tesla’s multi‑year rally and growing concerns about margin pressure from repeated vehicle price cuts, a heavy reliance on regulatory credits and interest income (about 40% of Q3 pre‑tax income), and missed product milestones that could expose valuation risk. By contrast, Coatue is boosting exposure to Alibaba’s AI and cloud franchise—Cloud Intelligence Group revenue rose ~26% YoY to $4.66bn in the June quarter with continued triple‑digit AI‑related growth—an inexpensive, cash‑rich way to play AI adoption in China, though investor should weigh ongoing China regulatory risks.

Analysis

Nov. 14 Form 13F filings show Philippe Laffont's Coatue Management (≈$41 billion AUM as of Sept. 30) trimmed Tesla (TSLA) by about 15% in the September quarter—a reduction of ~307,780 shares—and has sold more than 3.12 million shares (≈64% of the position) since March 31, 2023. The filing also shows Coatue increased its Alibaba (BABA) stake by ~130% in the quarter, adding roughly 1,128,826 shares.

Tesla’s fundamentals cited in the article raise valuation and margin concerns: Tesla delivered roughly 1.8 million EVs in both 2023 and 2024, has cut vehicle prices multiple times over the past 2.5 years, and roughly 40% of Q3 pre‑tax income derived from regulatory credits and net interest—items the article characterizes as unsustainable. The piece also highlights a pattern of missed high‑profile product milestones that could amplify downside if optimistic future scenarios are stripped from the valuation.

Coatue’s China bet targets Alibaba’s AI/cloud exposure: Cloud Intelligence Group sales rose ~26% year‑over‑year to $4.66 billion in the June quarter and AI‑related product revenue sustained triple‑digit YoY growth for the eighth consecutive quarter; shares trade at about 16x forward earnings and the company has a large net cash position. The article cautions that China regulatory unpredictability remains a material risk despite the attractive multiples and cloud growth trajectory.

Key Decisions for Investors

• Reduce or hedge Tesla exposure given compressing vehicle margins, repeated price cuts and the ~40% Q3 pre‑tax income reliance on regulatory credits and net interest
• Consider initiating or modestly increasing exposure to Alibaba as a lower‑multiple AI/cloud play—supported by 26% Cloud revenue growth to $4.66bn and triple‑digit AI revenue growth—while capping position size to manage China regulatory risk
• Monitor catalysts closely: Tesla automotive margin trends and regulatory‑credit contribution to profits, Alibaba Cloud AI revenue trajectory, and any new signs of Chinese regulatory intervention; rebalance if these metrics deviate materially from expectations