Billionaire Ken Griffin’s Surprising Stock Moves
Ken Griffin, the founder and CEO of Citadel Advisors, is known for his successful investment strategies. Recently, he made some unexpected moves in the stock market, selling a significant portion of his Nvidia shares and buying into Super Micro Computer.
Nvidia: A Leader in AI Infrastructure
Nvidia is a dominant player in the field of artificial intelligence (AI) infrastructure, with its graphics processing units (GPUs) being used to accelerate data center workloads. The company’s GPUs are considered the fastest accelerators on the market, and its ecosystem of software development tools is more robust than its competitors. Nvidia’s leadership in AI infrastructure is expected to continue, with analysts predicting that the company will maintain its market share for at least two to three years.
Why Did Griffin Sell Nvidia Shares?
Despite Nvidia’s strong position in the market, Griffin sold 9.2 million shares of the company’s stock in the second quarter, reducing his exposure by 79%. This move may have been due to the stock’s high valuation at the time, with Nvidia trading at an average valuation of 67 times earnings. However, since then, the company’s earnings have more than doubled, and the stock’s valuation has decreased to 64 times earnings.
Super Micro Computer: A Leader in AI Servers
Super Micro Computer is a manufacturer of servers, including complete server racks equipped with storage and networking. The company’s internal engineering capabilities and modular approach to product design allow it to bring new technologies to market quickly. Supermicro has secured a leadership position in AI servers, and its direct liquid cooling (DLC) technology is expected to defend its position in the market.
Why Is Griffin Buying Supermicro Shares?
Griffin bought 98,752 shares of Supermicro stock in the second quarter, increasing his position by 96%. This move may be due to the company’s strong position in the AI server market and its potential for growth. Supermicro’s revenue rose 143% in the fourth quarter of fiscal 2024, and its adjusted earnings are expected to grow 54% over the next 12 months.
Risks Associated with Supermicro
However, there are risks associated with investing in Supermicro. The company has faced allegations of accounting manipulation, and its CEO has been accused of making false statements. Additionally, Supermicro has been fined $17.5 million in the past for infractions similar to those outlined by Hindenburg Research.
Conclusion
Ken Griffin’s recent stock moves are surprising, but they may be indicative of his investment strategy. While Nvidia is a leader in AI infrastructure, its high valuation may have led Griffin to sell his shares. On the other hand, Supermicro’s strong position in AI servers and its potential for growth may have led Griffin to buy into the company. However, investors should be aware of the risks associated with Supermicro and do their own research before making any investment decisions.
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