Ken Griffin ranks thirty third on the Bloomberg Billionaires Index with a internet price exceeding $42 billion. He’s additionally the founder and CEO of Citadel, essentially the most worthwhile hedge fund in historical past as measured by internet positive aspects since inception. These bona fides make Griffin a great supply of inspiration, and retail buyers can comply with alongside together with his trades by reviewing quarterly Forms 13F.
Curiously, whereas Nvidia (NASDAQ: NVDA) and Taiwan Semiconductor (NYSE: TSM) are each positioned to profit from demand for synthetic intelligence (AI) infrastructure, Griffin purchased one inventory and offered the opposite within the third quarter.
- Nvidia: Griffin purchased 4.7 million shares, growing Citadel’s place by 194%.
- Taiwan Semiconductor: Griffin offered 135,556 shares, trimming Citadel’s stake by 7%.
These trades counsel Griffin’s confidence in Nvidia elevated considerably throughout the third quarter, whereas his confidence in Taiwan Semiconductor might have waned barely. However the third quarter resulted in September, so let’s take a more in-depth take a look at the place each AI shares stand in the present day.
Nvidia: The inventory Ken Griffin purchased
Nvidia is finest recognized for its graphics processing units (GPUs), chips that may carry out technical calculations extra rapidly and effectively than central processing units (CPUs). GPUs are used to speed up complicated information middle workloads like artificial intelligence (AI), and Nvidia GPUs are the business customary. The corporate has greater than 95% market share in AI accelerators, in line with Vijay Rakesh at Mizuho.
What actually units Nvidia aside is vertical integration that spans GPUs, CPUs, and networking tools, such that the corporate successfully builds whole information facilities. Additionally, its proprietary CUDA software program streamlines AI utility improvement throughout domains starting from robotics to drug discovery. That method lets Nvidia develop techniques with a superior whole price of possession, in line with CEO Jensen Huang.
Nvidia delivered an outstanding monetary report for the third quarter of fiscal 2025, which resulted in October 2024, beating estimates on the highest and backside traces. Income elevated 94% to $35 billion as information middle gross sales surged 112%, and automotive and robotics gross sales climbed 72%. In the meantime, non-GAAP earnings greater than doubled to achieve $0.81 per diluted share.
Trying forward, Wall Avenue expects Nvidia’s adjusted earnings to extend at 48% yearly by fiscal 2026, which ends in January 2026. That makes the present valuation of 55 occasions adjusted earnings look surprisingly cheap. Affected person buyers ought to contemplate shopping for a place on this inventory in the present day.
Taiwan Semiconductor: The inventory Ken Griffin offered
Taiwan Semiconductor Manufacturing Firm (TSMC) gives foundry providers to the semiconductor business, that means it shoulders the capital-intensive burden of fabricating chips designed by its clients. TSMC accounted for 62% of foundry gross sales within the second quarter, up 4 proportion factors from the identical interval final 12 months, in line with Counterpoint Analysis.
TSMC persistently gives essentially the most superior portfolio of course of applied sciences, that means its manufacturing capabilities are continually on the vanguard. As an illustration, its 3-nanometer course of is at present essentially the most superior node in the marketplace, and its 2-nanometer course of will attain quantity manufacturing subsequent 12 months. That benefit has helped TSMC win clients like Apple and Nvidia, which positions the corporate as a significant beneficiary of the AI increase.
TSMC reported sturdy monetary leads to the third quarter, beating estimates on the highest and backside traces. Income elevated 36% to $23.5 billion on account of sturdy momentum throughout the excessive efficiency computing, smartphone, and internet of things product classes. In the meantime, gross margin expanded 350 basis points on account of price enchancment efforts, and internet earnings elevated 50% to $1.94 per ADR.
On theearnings name CEO C.C. Wei informed analysts, “Our enterprise within the third quarter was supported by sturdy smartphone and AI associated demand for our business main 3-nanometer and 5-nanometer applied sciences.” He additionally mentioned income from AI server chips was on tempo to greater than triple for the complete 12 months, evidencing its potential to profit as companies construct out their AI infrastructure.
Trying forward, Wall Avenue expects TSMC’s earnings to develop at 23% yearly by 2025. That makes the present valuation of 30 occasions earnings look cheap. Importantly, earnings accelerated sequentially within the latest quarter (from 30% to 50%), however Ken Griffin did not know that will occur, which can clarify why he trimmed Citadel’s place. Regardless, buyers ought to contemplate shopping for a number of shares in the present day.
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Trevor Jennewine has positions in Nvidia. The Motley Idiot has positions in and recommends Apple, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Idiot has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
