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3 days ago
- Business
- Yahoo
We Just Got a Really Big Clue About Which Stocks Warren Buffett Has Been Buying and Selling
Key Points Quarterly-filed Form 13Fs provide a way for investors to track the buying and selling activity of Wall Street's leading money managers. Cost basis data in Berkshire Hathaway's latest quarterly results points to selling activity in two key areas -- with Bank of America stock likely on the chopping block, once again. Meanwhile, all signs suggest that Warren Buffett is continuing to pile into a mystery stock. 10 stocks we like better than Bank of America › Wall Street is a stomping ground for long-term wealth creation. However, no money manager has consistently generated outsized investment returns quite like Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett. As of the closing bell on Aug. 1, the appropriately nicknamed "Oracle of Omaha" had overseen a nearly 5,750,000% cumulative increase in his company's Class A shares (BRK.A) since becoming CEO six decades prior. This works out to a nearly 20% annualized return, which is almost double what the benchmark S&P 500 generated on an annualized total return basis, including dividends, over 60 years. Suffice it to say, Berkshire's billionaire chief has quite the following on Wall Street, with investors willing to mirror his trading activity and ride his coattails to big gains. Normally, Form 13F filings are used to track Buffett's buying and selling activity. This is a required filing with the Securities and Exchange Commission that's due no later than 45 calendar days following the end to a quarter for institutional investors with at least $100 million in assets under management. It provides investors with a concise list of which stocks the brightest asset managers bought and sold in the latest quarter. Although Berkshire Hathaway will file its 13F after the closing bell on Aug. 14, we don't have to wait that long to get a bead on what the Oracle of Omaha has been up to. Berkshire's recently filed second-quarter operating results have offered some big clues as to what's going on in the $281 billion portfolio Warren Buffett oversees. Warren Buffett continues to pare down his exposure to financials There's not a sector Berkshire Hathaway's billionaire boss understands better than financials. Buying and holding bank stocks and insurance companies is a way for Buffett to take advantage of long-winded periods of economic growth. However, Page 8 of Berkshire's first- and second-quarter operating results holds sizable clues as to what Buffett and his team have been doing on the trading front. In particular, the total cost basis for "Banks, insurance, and finance" stocks held in Berkshire's investment portfolio fell from $14.268 billion on March 31 to $14.08 billion on June 30. In other words, Buffett has continued to reduce his company's exposure to financial stocks. The likeliest culprit is Bank of America (NYSE: BAC), commonly referred to as "BofA." Since July 17, 2024, Buffett has green-lit the sale of more than 401 million shares, equating to 39% of his company's peak stake in BofA. During Berkshire Hathaway's 2024 annual meeting, Buffett implied that selling activity in Apple had to do with the belief that the peak marginal corporate income tax rate would rise at some point in the future. Thus, locking in sizable unrealized gains at a favorable tax rate would, eventually, be viewed as a smart move by investors. Three consecutive quarters of selling activity in Bank of America may represent nothing more than tax-based selling. But it might also signal that Berkshire's brightest investment minds are concerned about the Federal Reserve's rate-easing cycle. BofA is the most interest-sensitive of America's largest banks by total assets. While it benefited immensely from the Fed's aggressive rate-raising cycle from March 2022 to July 2023, its interest income may be disproportionately hurt by future rate cuts. The Oracle of Omaha is also selling consumer products stocks In addition to Warren Buffett continuing to dump financial stocks, Berkshire Hathaway's cost basis data shows a notable pare down in "Consumer products." Between March 31 and June 30, the cost basis for this grouping fell from $13.76 billion to $13.418 billion. This category is a bit trickier than financials because the Oracle of Omaha and his team have been active buyers of late. Specifically, Buffett and his team have purchased shares of Domino's Pizza and Pool Corp. for three consecutive quarters, and they've been adding pretty aggressively to alcoholic beverages company Constellation Brands. We also know that Coca-Cola, the No. 4 holding in Berkshire Hathaway's investment portfolio at the time of this writing, is viewed as an "indefinite" holding by Warren Buffett. The question is: What was sold? While it's possible e-commerce giant Amazon was pared down, my best logical guess is that Buffett and his team took some chips off the table with grocery chain Kroger (NYSE: KR), which is up 56% since the start of 2024. There's only so much juice that can be squeezed out of razor-thin grocery store margins. President Trump's tariff and trade policy throws potential monkey wrenches into the pricing power and operating margins of grocers. Furthermore, Kroger is trading at an estimated 14 times forward-year earnings per share. Even though this represents a discount to the S&P 500's forward-year price-to-earnings ratio, it's a premium for Kroger considering the company's projected annual sales growth of just 1% to 3%. Berkshire's billionaire boss is (likely) piling into his mystery stock The final of three categories listed in Berkshire Hathaway's quarterly reports is "commercial, industrial, and other." Whereas the other two categories denote decisive selling activity, the cost basis for this segment rose from $49.097 billion on March 31 to $51.9 billion by June 30. Despite being a net-seller of stocks for 11 consecutive quarters, we do know that Berkshire's boss has done some buying. The problem is this segment is composed of a wide swath of sectors, such as technology, healthcare, and industrials. What's noteworthy is that Berkshire Hathaway's first-quarter 13F had at least one or more securities that were given confidential treatment by regulators. Confidential treatment allows a prominent money manager to build up a position in one or more stocks, with the goal of amassing a sizable position without investors driving up the price. For instance, when Berkshire's 13Fs reveal Buffett has purchased a new stock or added to an existing position, it's not uncommon for investors to pile into that stock and, at least temporarily, drive its share price higher. Though it's possible we get some additional clarity on the mystery stock Buffett has been buying on Aug. 14, it's far likelier that the confidential treatment tag will remain in place as Berkshire Hathaway builds its position. Based on the clues we've received from Berkshire's first- and second-quarter reports, I remain convinced that this confidential treatment stock is an industrial company, perhaps in the logistics space. Although tech stocks are hot and healthcare stocks are cheap, neither is Buffett's specialty. Should you invest $1,000 in Bank of America right now? Before you buy stock in Bank of America, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Bank of America wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $635,544!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,099,758!* Now, it's worth noting Stock Advisor's total average return is 1,046% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Bank of America is an advertising partner of Motley Fool Money. Sean Williams has positions in Amazon and Bank of America. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway, and Domino's Pizza. The Motley Fool recommends Constellation Brands and Kroger. The Motley Fool has a disclosure policy. We Just Got a Really Big Clue About Which Stocks Warren Buffett Has Been Buying and Selling was originally published by The Motley Fool Sign in to access your portfolio
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7 days ago
- Business
- Yahoo
Warren Buffett's $177 Billion Warning to Wall Street Is Deafening and Unmistakable
Key Points Between Oct. 1, 2022 and June 30, 2025, Warren Buffett has overseen more than $177 billion in net stock sales. Though Berkshire Hathaway's billionaire chief would never bet against America, he's having a difficult time finding value in a historically pricey stock market. Patience plays a big role in Warren Buffett's investment strategy -- and his shareholders have reaped the rewards of this approach for decades. 10 stocks we like better than Berkshire Hathaway › In May, Wall Street's most-followed money manager, Berkshire Hathaway's (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett, made waves by announcing his intent to retire from the role of CEO by the end of the year. While not unexpected -- Buffett will turn 95 on Aug. 30 -- it nevertheless raises eyebrows given the Oracle of Omaha's outstanding investment track record, where he's overseen a cumulative return of nearly 5,750,000% in his company's Class A shares (BRK.A) spanning six decades. However, Buffett's pending retirement from day-to-day operations is, arguably, not the biggest story right now at Berkshire Hathaway. On Saturday, Aug. 2, Berkshire lifted the hood on its second-quarter operating results. While the report undeniably cautioned investors that U.S. tariffs would impact its operations (presumably in a bad way), Berkshire Hathaway's consolidated cash flow statement was the most important piece of information. Though investors look to Warren Buffett for his ability to spot amazing deals hiding in plain sight, with some aiming to mirror his buying activity, the hard truth is that Berkshire's billionaire chief has been a net seller of stocks for 11 consecutive quarters. Warren Buffett's $177 billion warning to Wall Street has become deafening In less than two weeks, following the close of trading on Aug. 14, Berkshire Hathaway will file Form 13F with the Securities and Exchange Commission. This is a required quarterly filing for institutional investors with at least $100 million in assets under management that allows investors to see which stocks Wall Street's smartest money managers have been buying and selling. Even though we don't yet know all of the stocks Buffett and his top advisors, Todd Combs and Ted Weschler, were buying and selling during the June-ended quarter, Berkshire's cash flow statement paints a very clear picture of how Buffett and his team approached their buying and selling activity. On page 6 of Berkshire's quarterly operating results, under "Cash flows from investing activities," you'll find the two most important line items of interest: "purchases of equity securities" and "sales of equity securities." During the second quarter, $3.909 billion was spent buying stocks, which is actually an uptick from the $3.183 billion spent buying stocks in the March-ended quarter. However, $6.915 billion, in aggregate, was sold, which is also higher than the $4.677 billion sold in the first quarter. On a net basis, Buffett oversaw $3.006 billion more in stock sales than purchases. Over the past 11 quarters (33 months), Warren Buffett has overseen: Q4 2022: $14.64 billion in net-equity sales Q1 2023: $10.41 billion Q2 2023: $7.981 billion Q3 2023: $5.253 billion Q4 2023: $0.525 billion Q1 2024: $17.281 billion Q2 2024: $75.536 billion Q3 2024: $34.592 billion Q4 2024: $6.713 billion Q1 2025: $1.494 billion Q2 2025: $3.006 billion Altogether, Buffett has sold $177.431 billion more in stocks than he's purchased since Oct. 1, 2022 -- and it represents an unmistakable and deafening warning to Wall Street. The Oracle of Omaha is struggling to find value in a historically pricey stock market Lengthy books have been written about Warren Buffett's investment philosophy and his laundry list of unwritten rules. But only two of these rules are unbreakable: Buffett won't ever bet against America; and Getting a good deal is vital. Keeping the first rule in mind (i.e., he's never going to short-sell stocks or buy put options against Wall Street's major stock indexes), the issue facilitating the Oracle of Omaha's 11-quarter stock-selling streak is that value has become almost impossible to find in the market. For example, the market-cap-to-GDP ratio, which has affably come to be known as the "Buffett Indicator," hit an all-time high a little over one week ago. This ratio, which adds up the value of all publicly traded companies and divides that amount by U.S. gross domestic product (GDP), has historically averaged 85%, when back-tested to 1970. But in late July, it topped 210%! It's a similar story for the S&P 500's (SNPINDEX: ^GSPC) Shiller price-to-earnings (P/E) Ratio, which is also known as the cyclically adjusted P/E Ratio, or CAPE Ratio. Unlike the traditional P/E ratio, which divides a company's share price by its trailing-12-month earnings, the Shiller P/E is based on average inflation-adjusted earnings over 10 years. Accounting for a decade of earnings history, as opposed to just 12 months, ensures that shock events and economic downturns can't skew the results. The S&P 500's Shiller P/E Ratio has been back-tested to January 1871 and sports an average multiple of 17.26. In late July, this multiple hit a closing value of 38.97, which made this the third-priciest continuous bull market in history. For some added context, the previous five instances where the Shiller P/E topped and sustained 30 were eventually followed by declines in the benchmark S&P 500 of at least 20%, if not substantially higher. Despite Warren Buffett having a near-record amount of cash at his disposal, there's simply no incentive for he or his team to aggressively deploy this capital given how historically pricey the stock market is at the moment. Patience is part of Buffett's investment strategy -- and it's paid off handsomely throughout the years For some investors, the Oracle of Omaha's willingness to sit on his hands and allow Berkshire Hathaway's cash pile to grow to more than $344 billion is unnerving. Historically, Buffett's greatest wealth-creating moments have come from investing his company' capital or making game-changing acquisitions. But make no mistake about it -- patience is built into Buffett's investment strategy, and it's paid off handsomely for his shareholders spanning six decades. No matter how amazing a company's management team or capital-return program happens to be, Berkshire's chief is going to stand pat if he doesn't believe he's getting a good deal. Waiting on price dislocations to materialize has been something of a calling card of success for Buffett during his tenure as CEO. Arguably one of the top examples of Berkshire's soon-to-be-retiring chief pouncing on a phenomenal deal hiding in plain sight is his $5 billion purchase of Bank of America (NYSE: BAC) preferred stock in August 2011. Though Bank of America wasn't thirsty for capital at the time, it was still working its way back from the depths of the financial crisis. Berkshire was able to infuse one of America's largest banks by assets with $5 billion in capital in exchange for preferred BofA stock. However, the crown jewel of this transaction was the warrants Berkshire received that allowed Buffett to pull the trigger on up to 700 million common shares of Bank of America stock at a $7.14 exercise price. When the entirety of these warrants was exercised in mid-2017, Berkshire enjoyed an instant windfall of $12 billion. Price dislocations in amazing businesses don't occur on a daily basis, and they're even scarcer when the stock market is historically pricey. While Buffett successor Greg Abel may be the one that eventually deploys Berkshire's treasure chest, understand that being patient is part of the plan and a key ingredient to Berkshire Hathaway's long-term success. Do the experts think Berkshire Hathaway is a buy right now? The Motley Fool's expert analyst team, drawing on years of investing experience and deep analysis of thousands of stocks, leverages our proprietary Moneyball AI investing database to uncover top opportunities. They've just revealed their to buy now — did Berkshire Hathaway make the list? When our Stock Advisor analyst team has a stock recommendation, it can pay to listen. After all, Stock Advisor's total average return is up 1,019% vs. just 178% for the S&P — that is beating the market by 841.12%!* Imagine if you were a Stock Advisor member when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,820!* The 10 stocks that made the cut could produce monster returns in the coming years. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Bank of America is an advertising partner of Motley Fool Money. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy. Warren Buffett's $177 Billion Warning to Wall Street Is Deafening and Unmistakable was originally published by The Motley Fool
Yahoo
25-07-2025
- Business
- Yahoo
Billionaire Terry Smith Sold Fundsmith's Entire Stake in Apple and 11X'd His Position in a Company Whose Addressable Market Can Hit $149 Billion by 2032
Key Points Quarterly Form 13Fs offer an up-close look at which stocks Wall Street's smartest asset managers have been buying and selling. Though profit-taking may explain why billionaire Terry Smith exited his fund's position in Apple, there may also be more nefarious factors at work. A market leader in an industry where consumer expenditures consistently increase is the new apple of Terry Smith's eye. 10 stocks we like better than Zoetis › The flow of information is constant and sometimes overwhelming on Wall Street. Trying to interpret an onslaught of earnings reports and monthly economic data releases each quarter can easily allow something of importance to go unnoticed. For example, May 15 marked the deadline for institutional investors with at least $100 million in assets under management to file Form 13F with the Securities and Exchange Commission. This is a required filing no later than 45 calendar days following the end to a quarter that provides investors with an up-close look at which stocks, exchange-traded funds (ETFs), and select options Wall Street's smartest asset managers have been buying and selling. As you might have guessed, Berkshire Hathaway's billionaire CEO Warren Buffett tends to be the most-followed of all money managers -- but he's not the only billionaire fund manager known for their investing prowess. The aptly dubbed "Warren Buffett of Britain," billionaire Terry Smith of Fundsmith, is another asset manager investors closely follow. Smith is an ardent value investor who, like Buffett, has an exceptional track record of spotting phenomenal deals hiding in plain sight. Over a four-quarter period (April 1, 2024 – March 31, 2025), Fundsmith's 13Fs show Terry Smith completely dumped Berkshire Hathaway's No. 1 holding, Apple (NASDAQ: AAPL), and more than 11X'd his fund's stake in a company whose addressable market is expected to grow by a compound annual rate of 10.5% through 2032. Britain's top billionaire value investor sent Apple stock packing For more than half a decade, Apple has been Berkshire Hathaway's top holding. Buffett has come to appreciate the exceptional loyalty Apple's customers show to the brand, CEO Tim Cook's leadership in building up its higher-margin subscription services segment, and Apple's world-leading capital-return program. Since kicking off its share-repurchase program in 2013, Apple has bought back around $775 billion worth of its own stock and reduced its outstanding share count by more than 43%. This has had a positive impact on earnings per share (EPS) and has made Apple stock more fundamentally attractive to value-seeking investors. Despite these positives, the Warren Buffett of the U.K. exited his fund's entire stake in Apple over the last year, with 1,597,544 shares being sold. One possible reason behind this selling activity is simple profit-taking. Between the third quarter of 2022, which is when Fundsmith first opened a position in Apple, and sometime in the third quarter of 2024, which is when Terry Smith sent these shares to the chopping block, shares of the company rallied from roughly the $150s to the $220s. This is a really nice gain for a megacap company in just two years, and may have enticed Fundsmith's billionaire chief to take his chips off the table. But there may be more to this selling activity than meets the eye. For instance, Apple isn't the value stock it once was. Between 2015 and 2019, investors could buy shares of the iPhone-maker for anywhere between 10 and 20 times trailing-12-month (TTM) EPS. But as of this writing following the close of trading on July 21, Apple is trading at a lofty 33 times TTM EPS. Not only is the stock market at one of its priciest valuations spanning more than 150 years, but it's been a long time since Apple stock was consistently this pricey. What makes Apple's multiple expansion all the more egregious, and may signal why Terry Smith kicked the stock to the curb, is the company's complete lack of growth. Between the end of fiscal 2021 and fiscal 2024 (Apple's fiscal year ends in late September), its net income actually fell from $94.7 billion to $93.7 billion. But because of Apple's aggressive share buyback program, its EPS rose from $5.67 to $6.11. If investors dig beneath the headline numbers, they'll discover that Apple's physical devices have been a drag for more than three years. Though it's possible Apple's investments in artificial intelligence (AI) will reignite its growth engine, a historically pricey stock sporting no growth in net income is an unfavorable combination. Billionaire Terry Smith believes this stock has legs Like Berkshire's Warren Buffett, Fundsmith's billionaire investor has been highly selective about his buying activity. Since the end of March 2024, Terry Smith has added to seven existing holdings and purchased stakes in four new stocks. Among these 11 buys, the one that really stands out is animal health medicines and diagnostics company Zoetis (NYSE: ZTS). For more than three years, Smith's fund had been holding in the neighborhood of 220,000 to 265,000 shares of Zoetis each quarter. But during the first quarter, 2,319,158 shares of Zoetis stock were purchased, which increased Fundsmith's position by 1,020% in just three months. One logical reason to believe Zoetis has legs is the virtually unstoppable growth in the global animal health market. Between medicines needed for livestock and the ever-expanding companion animal market (e.g., dogs and cats), Polaris Market Research projects the global animal health market will grow from $67 billion in 2024 to $149 billion by 2032. Additionally, sales data from the American Pet Products Association shows that U.S. pet industry expenditures don't decline on a year-over-year basis, regardless of the challenges thrown pet owners' way. Pets are often viewed as members of the family, and owners have demonstrated a willingness to spend freely to ensure the health and happiness of their "family" member. Beyond macro catalysts, billionaire Terry Smith is likely impressed by Zoetis being in the pole position among animal health companies. Zoetis has the largest share of the global animal health market, with north of 300 products spanning eight animal species, and 17 therapies generating at least $100 million in annual sales. Even though brand-name therapies have a finite period of sales exclusivity, the growth, pricing power, and superior margins associated with introducing novel drugs is well worth it. Furthermore, Zoetis has demonstrated a willingness to grow inorganically in order to expand its ecosystem of products and services. Since this decade began, it acquired Performance Livestock Analytics and Fish Vet Group to improve its diagnostic capabilities, and purchased Basepaws, which is a pet-care genetics company that ties into its diagnostic and novel-drug development programs. The steady expansion of Zoetis' ecosystem ensures that the loss of sales exclusivity on a single drug won't rock the boat. Lastly, billionaire Terry Smith may be attracted to Zoetis' reasonable valuation. Based on Wall Street's consensus EPS for 2026, Zoetis stock is trading at less than 22 times forecast EPS. This represents a 34% discount to its average forward-year earnings multiple over the trailing half-decade. Should you invest $1,000 in Zoetis right now? Before you buy stock in Zoetis, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Zoetis wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $634,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,046,799!* Now, it's worth noting Stock Advisor's total average return is 1,037% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Zoetis. The Motley Fool has a disclosure policy. Billionaire Terry Smith Sold Fundsmith's Entire Stake in Apple and 11X'd His Position in a Company Whose Addressable Market Can Hit $149 Billion by 2032 was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
24-07-2025
- Business
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Billionaire Dan Loeb Sold Third Point's Entire Stake in Meta Platforms and Has Piled Into a Market Leader Whose Addressable Market Can 25X in a Decade
Key Points Form 13Fs provide a quick and easy way for investors to track the quarterly buying and selling activity of Wall Street's leading money managers. Surprisingly, billionaire Dan Loeb dumped his fund's entire position in Meta Platforms during the March-ended quarter. Third Point's billionaire investor also grabbed 1.45 million shares of Wall Street's hypergrowth artificial intelligence (AI) stock. 10 stocks we like better than Nvidia › 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. 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 (NASDAQ: META) 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. 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 (NASDAQ: NVDA). 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. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $665,092!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,050,477!* Now, it's worth noting Stock Advisor's total average return is 1,055% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 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. Sean Williams has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms and Nvidia. The Motley Fool has a disclosure policy. Billionaire Dan Loeb Sold Third Point's Entire Stake in Meta Platforms and Has Piled Into a Market Leader Whose Addressable Market Can 25X in a Decade was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
18-07-2025
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Billionaire Stanley Druckenmiller Sold His Entire Stake in Palantir and Has Loaded Up on These 2 Exceptional Stocks for 3 Consecutive Quarters
Key Points Form 13Fs provide investors with an over-the-shoulder look at which stocks Wall Street's brightest money managers are buying and selling. There may be more than just profit-taking behind billionaire Stanley Druckenmiller's disposition of Palantir stock. Meanwhile, Druckenmiller can't stop building up his fund's stake in two outperforming businesses (one of which is another artificial intelligence stock). 10 stocks we like better than Palantir Technologies › Though earnings season is often viewed as the highlight of each quarter, there are a number of other data releases that can tell investors a lot about the health of the stock market. In particular, the filing of Form 13F with the Securities and Exchange Commission is, arguably, one of the most important quarterly data dumps. Institutional investors with at least $100 million in assets under management are required to file Form 13F no later than 45 calendar days following the end to a quarter. This filing allows investors to look over the proverbial shoulders of Wall Street's top-tier money managers to see what they've been buying and selling. Though 13Fs are far from perfect -- since they're up to 45 days old when filed, they can present a stale picture for active hedge funds -- they're invaluable in the sense that they highlight the stocks and trends piquing the interest of Wall Street's smartest investors. While Warren Buffett is the most-followed investor, he's far from the only billionaire fund manager known for their outsized returns. Duquesne Family Office's billionaire chief Stanley Druckenmiller is another billionaire asset manager with a knack for locating amazing deals. Based on the latest round of 13Fs filings, Druckenmiller completely jettisoned his fund's stake in Wall Street's artificial intelligence (AI) darling Palantir Technologies (NASDAQ: PLTR) and loaded up on two outstanding stocks for the third consecutive quarter. Billionaire Stanley Druckenmiller bids adieu to Palantir Perhaps the most eye-popping of all moves during the March-ended quarter was Druckenmiller sending all remaining shares of AI-driven data-mining specialist Palantir to the chopping block. Duquesne's 13F shows 41,710 shares were sold in the March-ended quarter, and nearly 770,000 shares were given the heave-ho since March 31, 2024. Profit-taking is a logical reason Druckenmiller was eager to depress the sell button. Since 2023 began, shares of Palantir have skyrocketed by more than 2,200%, as of the closing bell on July 15. With the average holding in Duquesne's investment portfolio sticking around for less than nine months, Druckenmiller has demonstrated a willingness to lock in profits. The concern is there may be more to Stanley Druckenmiller's exit than initially meets the eye. For example, in a May 2024 interview with CNBC, Duquesne's billionaire investor proclaimed, "AI might be a little overhyped now, but under-hyped long-term." This speaks to the reality that no game-changing innovation has escaped an early innings bubble-bursting event for more than 30 years. Artificial intelligence will need time to mature as a technology and there's not much evidence that businesses are anywhere close to optimizing their AI solutions, as of yet. Though Palantir's Gotham and Foundry platforms are respectively fueled by multiyear government contracts and enterprise subscriptions, which would help protect Palantir from a rapid decline in revenue, weak investor sentiment during a bubble would likely drag down its share price. The other glaring issue with Palantir Technologies is its valuation. Prior to the dot-com bubble bursting, businesses on the leading edge of the internet revolution peaked at price-to-sales (P/S) ratios of 31 to 43. Palantir is currently clocking in at a P/S ratio of almost 119. No stock in history has ever been able to maintain such an aggressive premium. Druckenmiller made this high-flying drug stock one of his fund's top holdings While Stanley Druckenmiller hasn't been shy about locking in profits in recent quarters, he's also done a bit of buying. Arguably no stock has been at the top of his buy list more than generic and novel drugmaker Teva Pharmaceutical Industries (NYSE: TEVA). Over the last three quarters (where 13Fs have been filed), Duquesne has purchased: Q3 2024: 1,427,950 shares Q4 2024: 7,569,450 shares Q1 2025: 5,882,350 shares (14,879,750 total shares held) In just nine months, Teva vaulted to the second-largest holding for Druckenmiller -- and it's not hard to understand why. First off, Teva has moved beyond the litigation issues that had previously crippled its stock. In 2023, it settled opioid litigation with 48 states for $4.25 billion, which includes $1.2 billion in generic Narcan (the opioid overdose reversal drug) that it'll supply to states. This amount is spread across 13 years and removed any potentially crippling financial burden from Teva's plate. Secondly, CEO Richard Francis has shifted more of his company's focus toward novel-drug development. Even though in-house therapies offer a limited period of sales exclusivity, the margins and growth potential with brand-name drugs is considerably higher than with generics. For instance, tardive dyskinesia drug Austedo has a shot at surpassing $2 billion in annual sales this year. Another reason Teva is landing on the radars of top-tier money managers like Stanley Druckenmiller is because of its much-improved balance sheet. Shortly after acquiring generic-drug company Actavis in 2016, Teva had north of $35 billion in net debt. This figure has now shrunk to less than $15 billion in net debt. The cherry on the sundae for investors is Teva Pharmaceutical's valuation. A forward price-to-earnings (P/E) ratio of 5.8 is almost unheard of amid a historically pricey stock market. Duquesne's billionaire chief piled into this AI stock instead Though Druckenmiller has prominently been a seller of high-growth tech stocks in recent quarters, world-leading chip fabrication company Taiwan Semiconductor Manufacturing (NYSE: TSM) is the exception to the rule. Over the previous three quarters where 13Fs were filed, Druckenmiller's fund has purchased: Q3 2024: 57,355 shares Q4 2024: 50,160 shares Q1 2025: 491,265 shares (598,780 total shares held) The near-term lure of Taiwan Semiconductor Manufacturing, which is also known as "TSMC," is its growing role in the AI revolution. Major graphics processing unit (GPU) companies are leaning on TSMC to rapidly expand its chip-on-wafer-on-substrate capacity, which is a necessity for the packaging of high-bandwidth memory in high-compute data centers. TSMC's rapid chip-fab expansion is leading to sustained double-digit growth and a mammoth backlog. But the key to Taiwan Semi's long-term success is that it's far more than just an AI play. For instance, TSMC is the primary manufacturer of the processors Apple uses in its iPhone. TSMC also manufactures chips and components found in next-generation vehicles and internet-connected devices, as well as smartphones. If the AI bubble were to form and burst, as history suggests it will, Taiwan Semi will have plenty of sales channels to fall back on beyond the AI space. Stanley Druckemiller might also be attracted to Taiwan Semiconductor's attractive valuation, relative to most AI stocks. Taking into account that chip fabrication companies tend to be highly cyclical, TSMC's forward P/E ratio of less than 22 is still pretty reasonable given an expected sales growth rate of 26% in 2025 and 16% next year. Should you buy stock in Palantir Technologies right now? Before you buy stock in Palantir Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Palantir Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,281!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,050,415!* Now, it's worth noting Stock Advisor's total average return is 1,058% — a market-crushing outperformance compared to 179% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 Sean Williams has positions in Teva Pharmaceutical Industries. The Motley Fool has positions in and recommends Apple, Palantir Technologies, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy. Billionaire Stanley Druckenmiller Sold His Entire Stake in Palantir and Has Loaded Up on These 2 Exceptional Stocks for 3 Consecutive Quarters was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
