Ever wonder where the big money moves next? Billionaire investor Dan Loeb just made a massive pivot, dumping a chunk of TSMC to go all-in on another trillion-dollar AI stock! What’s driving these high-stakes decisions, and what could it mean for the future of tech investments? You won’t believe the rationale behind this bold portfolio shake-up.
Billionaire investor Dan Loeb’s Third Point fund has executed a significant strategic shift, substantially divesting from the global semiconductor powerhouse Taiwan Semiconductor Manufacturing Company (TSMC) while simultaneously amplifying its exposure to a leading artificial intelligence (AI) stock. This calculated move offers a compelling glimpse into the evolving investment strategies of influential money managers navigating the dynamic technology landscape and the burgeoning AI sector.
Quarterly 13F filings, while sometimes containing historical data, provide invaluable insights into the stock market activities of Wall Street’s most astute fund managers. These disclosures reveal that Loeb, renowned for his astute selections in both large and small-cap growth stocks, has been a decisive seller of TSMC shares over the past year, signaling a recalibration of his portfolio.
Analysis of Third Point’s recent 13F filings indicates that between June 2024 and mid-2025, Loeb significantly reduced his fund’s holding in TSMC. A total of 595,000 shares were divested, representing a 29% reduction in Third Point’s stake. Despite this substantial sale, TSMC impressively remains the fund’s fifth-largest holding by market value, underscoring its continued importance in the portfolio.
One of the most probable drivers behind this notable reduction in TSMC shares is straightforward profit-taking. From May 2024 through mid-2025, Taiwan Semiconductor stock experienced a robust rally, surging approximately 65%. Given that the average holding period for Third Point’s top-10 positions typically hovers around 11 months, Loeb’s decision to lock in substantial gains aligns perfectly with his established investment strategy.
Furthermore, concerns regarding valuation and the financial implications of TSMC’s ambitious expansion into the United States may have influenced the divestment. While a forward price-to-earnings (P/E) ratio of 22 is considered reasonable compared to other dominant AI stocks, it represents a premium against TSMC’s historical forward P/E figures of 13, 16, and 20 in 2022, 2023, and 2024, respectively. The potential bargain once perceived by Loeb appears less apparent now, coupled with the rising costs and lead times associated with establishing new U.S. manufacturing facilities, which could impact future operating results.
Nevertheless, Taiwan Semiconductor Manufacturing Company maintains its indispensable position as the world’s leading outsourced chip fabricator. Despite potential short-term demand fluctuations, its extensive backlog and diversified revenue streams—serving critical sectors such as next-generation smartphones, automobiles, and Internet of Things devices—firmly position the company for sustained long-term success and continued relevance in the global technology ecosystem.
In a contrasting move, Dan Loeb significantly increased Third Point’s holdings in Nvidia, a trillion-dollar leader in the artificial intelligence revolution. Entering 2025 with no shares, Loeb oversaw the acquisition of 1.45 million shares in the first quarter and an additional 1.35 million shares in the second quarter. Third Point now boasts 2.8 million shares of Nvidia, solidifying its position as the fund’s third-largest holding.
The timing of Loeb’s increased investment in Nvidia appears to coincide with market corrections, offering opportunistic entry points for discerning investors. Such dips, often triggered by broader economic announcements, can present unique buying opportunities for experienced money managers seeking to capitalize on strong underlying growth trends like those powering the AI sector, making it an attractive target for strategic capital deployment.
However, continued exponential upside for Nvidia is not guaranteed. History frequently demonstrates that investors tend to overestimate the early-stage utility and adoption rates of groundbreaking technologies, often leading to unrealistic expectations that are ultimately unmet. It remains to be seen if the current enthusiasm surrounding the artificial intelligence revolution will follow a similar pattern, warranting careful consideration for long-term investors.
