Billionaire Dan Loeb Sold 29% of Third Point's Stake in TSMC in Favor of Another Trillion-Dollar Artificial Intelligence (AI) Stock

Billionaire investor Dan Loeb's Third Point has strategically rebalanced its portfolio, reducing its stake in Taiwan Semiconductor Manufacturing (TSMC) by 29% over the past year, likely due to profit-taking and valuation concerns. Concurrently, Loeb aggressively acquired 2.8 million shares of Nvidia across Q1 and Q2 2025, making it his fund's third-largest holding, signaling a strong conviction in Nvidia's AI GPU dominance and ecosystem. This shift indicates a strategic pivot towards direct AI exposure while potentially de-risking from a chip fabricator facing higher costs and valuation premiums.

Analysis

Analysis of Third Point's latest 13F filings reveals a significant strategic rotation within its AI-themed holdings, characterized by a reduction in Taiwan Semiconductor Manufacturing (TSM) and the establishment of a large new position in Nvidia (NVDA). The fund reduced its TSM stake by 29% over the past year, cutting 595,000 shares, a move likely driven by both profit-taking after a 65% stock rally and valuation concerns, as TSM's forward P/E ratio has expanded to nearly 22, a notable premium to its 2022-2024 range of 13-20. Potential margin pressure from the costly expansion of U.S. manufacturing facilities to mitigate tariff risks may also be a factor. Concurrently, Dan Loeb aggressively built a position in Nvidia, acquiring 2.8 million shares in the first half of 2025, making it the fund's third-largest holding. This conviction buy appears predicated on Nvidia's undisputed dominance in AI-accelerated data centers with its H100 and Blackwell GPUs, a strong product roadmap, and the significant competitive moat provided by its CUDA software ecosystem. The move suggests a pivot from a foundational, but potentially lower-margin, chip fabricator to the primary, high-margin beneficiary and market leader of the AI revolution.

Key Decisions for Investors

• Investors should re-evaluate their semiconductor exposure, considering the rationale behind Loeb's rotation from a broad enabler like TSMC to a direct AI leader like Nvidia, particularly weighing valuation discipline against market dominance.
• For those holding TSMC, it is prudent to monitor its forward P/E multiple against historical levels and news regarding the costs and timelines of its U.S. fab expansion, as these appear to be key concerns for institutional investors.
• While Nvidia's fundamental strength is clear, potential investors should be mindful of the historical precedent for tech bubbles and the long-term risk of competition from Nvidia's own customers developing in-house AI chips.
• Use 13F filings as a signal of institutional sentiment and positioning, but recognize their backward-looking nature; Loeb's opportunistic buying of Nvidia during an April market dip highlights the value of having a prepared watchlist.