Dan – Earlybirds Invest

Between earnings season — the six-week period every quarter where a majority of the most-influential businesses report their operating results — economic data releases, and updates from the Trump administration, keeping up on market-moving news events can be challenging for investors. In fact, it’s easy for something of importance to slip through the cracks.

One key data release that investors might have overlooked is the May 15 deadline for institutional investors with at least $100 million in assets under management to file Form 13F with the Securities and Exchange Commission. A 13F is required to be filed no later than 45 calendar days following the end to a quarter, and it provides investors with a concise snapshot of which stocks Wall Street’s top-tier asset managers have been buying and selling.

Though 13Fs have their flaws — e.g., they can offer a stale snapshot for very active hedge funds — they’re invaluable in helping investors piece together which stocks and trends have the undivided attention of successful fund managers.

A stock chart displayed on a computer monitor that's being reflected on the eyeglasses of a money manager.

Image source: Getty Images.

While investors tend to wait on the edge of their seat to see what billionaire Warren Buffett has been up to, he’s far from the only billionaire known to make waves in the stock market. Third Point’s Dan Loeb is another billionaire asset manager known for spotting good deals.

During the March-ended quarter, Third Point’s billionaire chief made two curious trades in the artificial intelligence (AI) arena. He sent his fund’s entire stake in Meta Platforms (META -0.98%) packing, and loaded up on shares of an undisputed AI leader whose addressable market can potentially grow 25-fold over a 10-year stretch.

Billionaire Dan Loeb’s Third Point logs out of Meta

Based on Third Point’s 13F, Loeb completely exited nine positions during the first quarter, none of which is more of an eyebrow-raiser than social media titan Meta Platforms. Loeb green-lit the sale of all 665,000 shares that were held at the end of 2024.

It’s quite possible that this sale represented nothing more than a profit-taking opportunity for Third Point’s billionaire chief. On average, Loeb’s fund holds its positions for a little over 13 months, and Third Point’s Meta stake had been initiated during the third quarter of 2023. With Meta stock more than doubling during this period, Loeb had plenty of reason to cash in his chips.

The question is: Was something more nefarious behind this selling activity than just benign profit-taking?

One concern is the potential for the U.S. economy to fall into a recession. Though the New York Federal Reserve’s recession probability tool only shows 28.7% chance of a recession occurring through June 2026, it has an uncanny track record of successfully forecasting economic downturns when this probability climbs above 32%, which it did in 2023 and 2024. The last time the New York Fed’s recession probability indicator provided a false positive was October 1966.

While most stocks tend to be adversely impacted by recessions, Meta is particularly vulnerable since almost 98% of its net sales derive from advertising. Businesses aren’t shy about paring their marketing budgets at the first signs of trouble.

It’s also possible Dan Loeb was skeptical of Meta’s future stock performance given CEO Mark Zuckerberg’s plans to spend aggressively on AI-data center infrastructure. Despite Zuckerberg’s phenomenal track record of developing new products and monetizing them only when the time is right, he’s been consistently upping his company’s projected capital expenditures (capex). Meta’s capex forecast for 2025 slots in between $64 billion and $72 billion, which is up $5.5 billion at the midpoint from the company’s prior guidance.

Considering how pricey the stock market is as a whole, Wall Street and investors have little tolerance for mistakes. Meta Platforms spending billions on AI infrastructure above its prior forecast leaves the door open for disappointment.

While I don’t fault Dan Loeb for locking in his profits, I ultimately believe he’ll regret exiting this position when looking back years from now.

A toy rocket set atop messy stacks of coins and paperwork displaying financial data and charts.

Image source: Getty Images.

Third Point’s billionaire investor scooped up shares of a hypergrowth stock

Excluding options, Third Point’s 13F from the March-ended quarter shows billionaire Dan Loeb opened 10 new positions, none of which offers more intrigue than the face of the AI revolution, Nvidia (NVDA -2.42%).

During the first quarter, Loeb scooped up 1.45 million shares of Nvidia, which marks the first time his fund has held shares of this AI leader since the second quarter of 2023.

To state the obvious, the global potential for artificial intelligence as a technology is otherworldly. The ability for software and systems empowered with AI to make split-second decisions without human oversight is a game-changer for most industries around the world. Based on estimates from UN Trade and Development, the global AI market is projected to skyrocket from a reported $189 billion in 2023 to $4.8 trillion come 2033. That’s a 25X increase in a decade, for those of you keeping score at home.

Nvidia becoming Wall Street’s largest publicly traded company is a reflection of just how dominant its Hopper and Blackwell graphics processing units (GPUs) have been in AI-accelerated data centers. With demand for AI-GPUs significantly outweighing their supply, Nvidia has been able to not only sell more GPUs on a year-over-year basis, but also charge a 100%-plus premium to its direct external rivals. Not surprisingly, Nvidia’s gross margin soared as the AI revolution took shape.

Third Point’s billionaire investor might also be excited about Nvidia’s innovation timeline. CEO Jensen Huang expects to bring a new advanced AI chip to market annually. If all goes according to plan, Blackwell Ultra (2025), Vera Rubin (2026), and Vera Rubin Ultra (2027) will follow in the footsteps of Hopper and Blackwell. The key point here is that Nvidia’s compute advantages appear untouchable.

The other factor that’s kept Nvidia humming along is its premier CUDA software platform. This is what developers use to maximize the compute potential of their Nvidia GPUs, as well as to build and train large language models. CUDA is quietly doing a phenomenal job of keeping Nvidia’s clients loyal to its ecosystem of products and services.

But what, arguably, makes this buy intriguing is its timing. For more than three decades, every game-changing innovation has worked its way through an early stage bubble-bursting event. Though artificial intelligence shows plenty of promise, most businesses haven’t come anywhere close to optimizing their AI solutions as of yet. With signs pointing to AI being the next in a long line of bubbles, Nvidia stock could eventually crumble.

Loeb’s buy is also interesting in the sense that it comes as competition in the AI space is exploding. While most investors are paying close attention to direct external competition, the biggest threat to Nvidia likely comes from within. Many of its largest customers by net sales are internally developing AI-GPUs for their data centers. These chips, while inferior on a compute basis to Nvidia’s hardware, are notably cheaper and more readily accessible. They can minimize AI-GPU scarcity, reduce Nvidia’s pricing power and margins, and narrow its future opportunities in AI-accelerated data centers.

It wouldn’t be a surprise if this turned out to be nothing more than a quick trade for Third Point’s chief.

What’s driving Tesla stock off course?

A combination of things have weighed on Tesla stock over the last several weeks. For starters, the company’s fourth-quarter and full-year 2024 financial results were less than stellar. While the company’s energy storage and services business shined, the core EV operation floundered. Sales from EVs declined by 6% year over year, leading some investors to increase pessimism about the strength of the economy as well as Tesla’s position relative to competition both domestically and overseas, particularly in China.

On top of that, Trump has already made good on one campaign promise: imposing tariffs. And he’s threatened more. One of the countries facing new tariff policies is China, which is a major market for Tesla. Given how new these policies are, there are a lot of unknowns revolving around how different countries will respond and how trade could be impacted. This is all to say that Tesla could theoretically be negatively impacted by new tariff discussions.

Lastly, Musk has been spending quite a bit of time in Washington as he leads Trump’s cost-saving “Department of Government Efficiency” initiative. His time spent in Washington has led some investors to worry that he may be too distracted and focusing less on Tesla.

I’ll admit that all three of the points hold some merit. But before hitting the panic button, let’s regroup and consider some other topics.

Image source: Getty Images.

Keep the long-term agenda in focus

Despite a lackluster earnings report, Musk did his usual on the call and managed to get investors excited about Tesla’s future. He spent the majority of the call talking about artificial intelligence (AI), and how Tesla is using the technology to hone its self-driving car software as well as build a fleet of humanoid robots called Optimus. These areas are where Wall Street seems to be focusing.

Dan Ives leads technology research at Wedbush Securities, and on Feb. 12, Ives published a short research note in which he acknowledged the risks I described above but ultimately made the case for why he’s sticking to a bullish narrative for Tesla.

Ives said a “deregulatory landscape” under the Trump administration will unlock $1 trillion of value for Tesla’s autonomous driving project. With a 12-month price target of $550, Ives is suggesting that Tesla stock could soar 52% from its current levels.

I tend to agree with Ives on this one. In my eyes, the amount of time Musk spends in Washington is independent of any existing projects at Tesla. For example, Tesla is planning to launch unsupervised full self driving (FSD) services in Austin come June. Unless there is an unforeseen product snag, I don’t see this timeline changing just because Musk is spending a lot of time away from Tesla’s physical headquarters.

To me, the long-term narrative for Tesla’s future — namely, its goal to become an AI powerhouse — hasn’t changed at all. The only thing that has changed, however, is the perception surrounding Tesla given Musk’s latest passion project in D.C.

I still see Tesla as compelling opportunity to buy and hold for long-term investors, and I would consider scooping up shares during the ongoing sell-off.