Jeff Yass is a billionaire investor best known for co-founding Susquehanna International Group (SIG). SIG is a powerhouse fund boasting nearly $60 billion in assets under management.
According to SIG’s latest 13F filing, the fund sold approximately 5.6 million shares in semiconductor darling Nvidia (NASDAQ: NVDA) during the third quarter — reducing its stake by 29%. At the same time, Yass and his constituents increased SIG’s position in Micron Technology (NASDAQ: MU), scooping up 2.2 million shares and increasing the fund’s exposure by 46%.
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Below, I’m going to detail why I like this swap and see Yass’ decision as a wise choice. Let’s dig in.
The table below illustrates SIG’s position in Nvidia stock over the past year:
|
Category |
Q3 2023 |
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
|---|---|---|---|---|---|
|
Shares owned (in millions) |
43.6 |
31.9 |
72 |
19.5 |
13.9 |
Data source: Hedge Follow.
With the exception of a major purchase during the first quarter, SIG has been a net seller of Nvidia stock over the past 12 months. In particular, the fund has done quite a bit of trimming to its Nvidia stake between the last two quarters.
It’s well-known by now that Nvidia is the king of the semiconductor realm. Moreover, with its upcoming next-generation Blackwell GPU architecture on the verge of launching, how does it make sense to sell the stock right now?
To me, the chart above says it all. Over the last two years, shares of Nvidia have risen 786% and the company is now the most valuable in the world (as of intra-day Nov. 22).
Simply put, even with the tailwinds from Blackwell and ongoing demand for GPUs, Nvidia stock is highly unlikely to rise by this magnitude again anytime soon (if ever). On top of that, many of Nvidia’s own customers including Microsoft, Amazon, Meta Platforms, and Alphabet, are beginning to build their own chip ware. Candidly, I think the long-term narrative surrounding Nvidia is pretty murky.
The table below illustrates SIG’s position in Micron stock over the past year:
|
Category |
Q3 2023 |
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
|---|---|---|---|---|---|
|
Shares owned (in millions) |
1.0 |
1.7 |
1.3 |
4.8 |
6.9 |
Data source: Hedge Follow.
It’s interesting that as SIG trimmed its position in Nvidia, the firm has quietly increased its stake in Micron by nearly sevenfold. And in a lot of ways, I think this is actually a pretty savvy move.
Micron’s position in the chip market is unique, as the company specializes in memory and storage solutions. Right now, one of the most important variables needed to build large language models (LLMs) and develop generative AI applications is access to data.
However, feeding data into AI models is only one part of the equation. Over time, developing AI-powered products and services is inevitably going to become more sophisticated. As training and inferencing workloads for these models become more demanding, businesses are going to need to increase investment in storage and memory solutions.
Micron’s expertise in storage and memory is well-positioned to capitalize on long-term secular tailwinds, driven by rising demand for more efficient AI protocols and increased infrastructure investments.
While I think Nvidia will remain a core pillar supporting the AI movement, my outlook is that its growth is going to slow down sooner than later as alternative chips come to market. As I’ve expressed several times, I continue to see investing in Nvidia as more of a trade now and less so of a buy-and-hold type of position.
By contrast, I think Micron’s chapter in the broader chip story is just beginning. Moreover, given the company’s unique position in storage and memory chips, I think Micron is still flying under the radar. At the end of the day, I think Yass and SIG are making the appropriate call by trimming Nvidia and looking to identify alternatives in the semiconductor landscape that are poised for breakout growth.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Billionaire Jeff Yass Reduced Susquehanna’s Stake in Nvidia by 29% and Bought 2 Million Shares of This Other Artificial Intelligence (AI) Semiconductor Stock Instead was originally published by The Motley Fool
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