Billionaire Dan Loeb of Third Point Is Piling Into Nvidia for a 4th Consecutive Quarter, but Dumped His Fund's Entire Stake in This "Magnificent Seven" Stock

Data is the fuel that keeps Wall Street's engine turning -- and one of the most important data releases of the entire quarter occurred two weeks ago. By no later than Feb. 17, institutional investors with at least $100 million in assets under management were required to file Form 13F with the Securities and Exchange Commission.

A 13F offers a way for investors to track which stocks Wall Street's brightest investors, including billionaire Dan Loeb of Third Point, bought and sold in the most recent quarter. Third Point's 13F detailing fourth-quarter trading activity shows Loeb was a buyer of artificial intelligence (AI) superstar Nvidia (NASDAQ: NVDA) for a fourth consecutive quarter, but was also a seller of another "Magnificent Seven" stock in the AI arena.

Image source: Getty Images.

Billionaire Dan Loeb is loading up on Nvidia

According to Third Point's latest filing, Loeb purchased 100,000 shares of Nvidia in the December-ended quarter, which follows additions of 50,000 shares in the third quarter, 1.35 million shares in the second quarter, and 1.45 million shares in the first quarter of 2025.

The allure of Nvidia is undoubtedly its unmatched graphics processing units (GPUs). The company's Hopper (H100), Blackwell, and Blackwell Ultra chips hold a virtual monopoly in AI-accelerated data centers and, thanks to persistent GPU scarcity, continue to command a premium selling price.

Furthermore, no other companies are in the same zip code as Nvidia's AI hardware in terms of compute capabilities. CEO Jensen Huang is spending aggressively to ensure his company can introduce a new advanced chip annually and maintain its compute superiority.

The other unsung hero for Nvidia is its CUDA software platform. This is the toolkit developers use to maximize the compute potential of their Nvidia GPUs. The ongoing evolution of CUDA not only keeps existing clients loyal to the company's ecosystem of products and services but also extends the utility of prior-generation chips.

With Nvidia's gross margin holding firm in the mid-70% range and GPU scarcity ongoing, it's evident that billionaire Dan Loeb sees Wall Street's most valuable company becoming even larger.

Image source: Getty Images.

Third Point's billionaire boss unfriends Facebook parent Meta Platforms

Although Dan Loeb is typically attracted to growth stocks with well-defined competitive advantages, Third Point's 13F shows social media colossus Meta Platforms (NASDAQ: META) was given the heave-ho. Following two straight quarters of purchases, Loeb dumped all 220,000 shares.

Loeb's about-face with the parent company of Facebook may be based on simple profit-taking. Between April and October, Meta stock rallied by more than 50%. With an average hold time of less than 18 months for all of the securities in Third Point's portfolio, it's clear Loeb isn't afraid to cash in his chips.

But there may be more to this story than just profit-taking.

Meta has also been increasing its capital expenditures forecast for its AI Superintelligence Lab on a near-quarterly basis. While AI has investors seeing dollar signs, higher costs may weigh on earnings growth. It's not uncommon for Meta CEO Mark Zuckerberg to wait years before monetizing new projects.

Lastly, it's possible that Third Point's billionaire boss was concerned about a potential U.S. recession. Meta generates nearly 98% of its net sales from ads (advertising is highly cyclical), effectively tying it to the U.S. economy.

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.