Growth-focused billionaire investor Philippe Laffont has made a strategic pivot, selling Nvidia stock for seven consecutive quarters while heavily investing in a trillion-dollar AI infrastructure stock. This move highlights the evolving landscape of artificial intelligence investments.
The Strategic Shift Away from Nvidia
At the end of Q1 2023, Coatue Management held approximately 49.8 million shares of Nvidia (split-adjusted). Since then, Laffont has sold nearly 39.8 million shares—about 80% of Coatue's peak position. This consistent selling activity suggests more than simple profit-taking from Nvidia's nearly 10X returns since 2023.
Why the Move Makes Sense
Several factors likely influenced this decision:
- Competitive pressures: Nvidia faces increasing competition in the AI-GPU market
- Customer in-house development: Major clients are developing their own AI chips
- Valuation concerns: Nvidia's pricing power may decline as AI-GPU scarcity decreases
- Historical patterns: Next-big-thing technologies often experience early expansion bubbles
The New AI Infrastructure Favorite: Taiwan Semiconductor Manufacturing (TSM)
While reducing Nvidia exposure, Laffont has aggressively accumulated Taiwan Semiconductor stock—purchasing nearly 10 million shares since 2023. TSM now represents Coatue's third-largest holding.
Why Taiwan Semi?
Several compelling factors make TSM attractive:
- Critical AI infrastructure provider: Fabricates chips for top AI companies including Nvidia
- CoWoS packaging technology leader: Essential for high-performance AI solutions
- Diversified client base: Serves Apple and other major tech companies
- Capacity expansion: Plans to nearly quadruple CoWoS production by 2026
Risks to Consider
While Taiwan Semi presents strong fundamentals, investors should note:
- Geopolitical factors: Most production capacity located in Taiwan
- Valuation premium: Currently trades at 32% above its 5-year average P/E
- Market conditions: Premium stocks may suffer in market corrections
FAQ: Philippe Laffont's Investment Moves
Why is Philippe Laffont selling Nvidia?
👉 Laffont likely sees reduced competitive advantage and valuation concerns as major factors.
What makes Taiwan Semiconductor attractive?
TSM provides critical fabrication services for AI chips and benefits from strong demand growth.
How much Nvidia has Coatue sold?
Approximately 39.8 million shares—80% of their peak position.
What percentage of Coatue's portfolio is TSM?
Taiwan Semi is now Coatue's third-largest holding.
Is Taiwan Semi overvalued?
While not egregiously priced, it trades at a premium to historical valuations.
What are the geopolitical risks for TSM?
Potential trade tensions and import tariffs could impact operations.
The investment shift by Philippe Laffont underscores the dynamic nature of AI infrastructure investing. While Nvidia remains dominant, savvy investors are diversifying into foundational companies like Taiwan Semiconductor that support the broader AI ecosystem. This move highlights the importance of looking beyond obvious AI winners to the underlying infrastructure enabling the revolution.
👉 For more insights on AI investment trends, stay tuned to our updates.