Jeff Yass is a billionaire investor best known for co-founding the Susquehanna International Group (SIG). SIG is a powerful fund with nearly $60 billion in assets under management.
According to SIG’s latest 13F filing, the fund has sold approximately 5.6 million shares of semiconductor products. Nvidia (NASDAQ: NVDA) during the third quarter – reducing its stake by 29%. At the same time, Yass and his constituents increased SIG’s position Micron technology (NASDAQ:MU)acquiring 2.2 million shares and increasing the fund’s exposure by 46%.
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Below I’m going to explain why I like this trade and consider Yass’s decision 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 large purchase in the first quarter, SIG has been a net seller of Nvidia stock over the past twelve months. In particular, the fund has made quite a bit of cuts to its Nvidia stake between the last two quarters.
It is now known that Nvidia is the king of the semiconductor kingdom. Furthermore, with the upcoming next-generation Blackwell GPU architecture about to be launched, how does it make sense to sell the stock now?
To me, the above diagram says it all. Over the past two years, Nvidia shares have risen 786% and the company is now the most valuable in the world (as of intraday November 22).
Simply put, even with Blackwell’s tailwinds and continued demand for GPUs, it’s highly unlikely that Nvidia stock will rise by this magnitude again anytime soon (if ever). Additionally, many of Nvidia’s own customers include Microsoft, Amazon, MetaplatformsAnd Alphabetare starting to build their own chipware. Frankly, I think the long-term story surrounding Nvidia is pretty murky.
The table below illustrates SIG’s position in Micron stock over the last 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.
Interestingly, while SIG was reducing its position in Nvidia, the company quietly increased its stake in Micron almost sevenfold. And in many ways, I think this is actually a pretty smart move.
Micron’s position in the chip market is unique, as the company specializes in memory and storage solutions. Right now, access to data is one of the most important variables needed to build large language models (LLMs) and develop generative AI applications.
However, feeding data into AI models is only part of the equation. Over time, the development of AI-powered products and services will inevitably become more sophisticated. As training and inference workloads for these models become more demanding, companies will need to increase their investments in storage and memory solutions.
Micron’s expertise in storage and memory is well positioned to benefit from long-term tailwinds driven by rising demand for more efficient AI protocols and increased infrastructure investment.
While I think Nvidia will remain a core pillar supporting the AI movement, I expect growth to slow down sooner or later as alternative chips come to market. As I’ve stated several times, I continue to view investing in Nvidia more as a transaction and less as a buy-and-hold position.
In contrast, I think Micron’s chapter in the broader chip story is just beginning. Furthermore, given the company’s unique position in storage and memory chips, I think Micron is still flying under the radar. Ultimately, I think Yass and SIG are making the right call by downsizing Nvidia and finding alternatives in the semiconductor landscape that are primed for breakthrough 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, a director at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Adam Spatacco holds positions at Alphabet, Amazon, Meta Platforms, Microsoft and Nvidia. The Motley Fool holds positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
Billionaire Jeff Yass cut Susquehanna’s stake in Nvidia by 29% and bought 2 million shares of these other Artificial Intelligence (AI) Semiconductor stocks. Instead it was originally published by The Motley Fool
