According to Third Point LLC's latest letter to shareholders, nearly half of the latest investment holdings of Third Point, a top asset management agency founded and led by billionaire Daniel Loeb (Daniel Loeb) with the title of “Wall Street Giant,” nearly half of the stock portfolio is closely related to artificial intelligence technology, including the one leading the development of global AI technology$Alphabet-A (GOOGL.US)$, and the “King of Global Chip Foundry”$Taiwan Semiconductor (TSM.US)$.

Third Point CEO Loeb said in a letter to investors that nearly half of its stock portfolio is related to artificial intelligence, including Google. The agency said it made a “significant investment” in the first quarter to the AI technology leader, and stated that in the three months ending March, Third Point chose to increase its holdings in TSMC and announced$Microsoft (MSFT.US)$“AI-driven” catalyst positions such as the London Stock Exchange Group, which is developing big models.

It is worth noting that the 13F report, which tracks Wall Street asset management agencies' US stock portfolios, has yet to be published. Loeb's large positions on AI technology may suggest to a certain extent that Wall Street asset management giants are still focusing on AI.

“Asset management giant Third Point, headquartered in Mountain View, California, has significant distribution and technical advantages over its competitors, and will use its artificial intelligence capabilities to unify, enhance, and better monetize its entire product portfolio.” The agency's founder and CEO, billionaire Daniel Loeb said in a letter to investors on April 30.

According to the data, the revenue of the asset management agency's flagship fund increased by about 7.8% during the same period, while the return rate of the S&P 500 Total Return Index (S&P 500 Total Return Index) was close to 11% during the same period. Although the flagship fund failed to outperform the US stock market, the agency said that due to Facebook's parent company$Meta Platforms (META.US)$and$Amazon (AMZN.US)$The fund achieved “solid growth performance” due to the strong stock price performance of large technology giants such as the company.

Why did Third Point choose Google and TSMC?

Loeb wrote in the letter: “Unlike the technological paradigm shift in the past, this new technology is very beneficial to established technology companies that are using huge capital and intellectual battleboxes to win the artificial intelligence arms race.”

Global funding for Meta,$NVIDIA (NVDA.US)$In addition, the seven major US tech giants such as Microsoft, and bets on chip giants such as TSMC can be said to be linked to Loeb's views. Magnificent 7 includes: Apple, Microsoft, Google,$Tesla (TSLA.US)$, Nvidia, Amazon, and Meta Platforms. Global investors have continued to flock to the seven tech giants since 2023 and the first quarter of 2024. The main reason is that they are betting that technology giants are in the best position to use artificial intelligence technology to expand revenue due to their huge market size and financial strength.

Third Point revealed the important logic of investing in Google and TSMC, probably because they occupy an important position in the AI field. Earlier this year, tech giant Google launched a new version of its more powerful artificial intelligence model, Gemini 1.5 Pro. Google said it can handle larger scale text, video, and even audio output compared to competitors such as GPT-4. Google also renamed its chatbot Gemini and released a larger, more open language model to help Google win over the open source ecosystem. Furthermore, DeepMind, Google's artificial intelligence business unit, wants to spend more than 100 billion US dollars to increase the deployment of AI. Since this year, Google's stock price has risen close to 20%.

After a lapse of four years, TSMC, which has the title of “King of Chip Foundry,” has returned to the top ten listed companies in the world by market capitalization. TSMC's US stock ADR has risen by as much as 30% since this year, outperforming the market by a large margin$PHLX Semiconductor Index (.SOX.US)$. In the context of the current surge in demand for AI chips, TSMC, as the world's leader in AI chips, Nvidia, and the only foundry for AI chips developed in-house by cloud giants such as Microsoft and Amazon, is bound to continue to benefit from extremely strong demand for AI chips. With the world's top 3nm core manufacturing technology and the most advanced Chiplet packaging, TSMC may have begun a model of simultaneous surge in stock prices and performance.

At the beginning of this year, Third Point was not the only top hedge fund with lower fund earnings than the US stock market. As high-weight stocks such as Meta, Nvidia, and Microsoft continued to gain strength,$S&P 500 Index (.SPX.US)$The increase in the first quarter was as high as 10%. Greenlight Capital (Greenlight Capital), a subsidiary of David Einhorn (David Einhorn), had a return of only 4.9% after deducting processing fees and other expenses in the first quarter, significantly outperforming the S&P 500 index.

The “AI investment frenzy” is not over!

Global hedge funds known as “smart money” increased their positions in US technology stocks at the fastest speed in over a year last week. In particular, they accelerated the influx of chip stocks that have fully benefited from the global “AI investment frenzy,” showing a full recovery in capital risk appetite for technology stocks. According to data compiled by Goldman Sachs Group's brokerage business, US technology stocks last week recorded the largest net buying since December 2022. This trend is mainly driven by long positions and short compensation.

Although almost all technology sub-industries have capital inflows, chip design companies and semiconductor equipment companies that focus on the AI field are the main buyers of hedge funds. According to the data, the hedge fund allocation ratio for US stocks in the chip industry rose from 1.1% at the beginning of the year to 4.4%, which is the highest allocation level in more than five years.

Overall, hedge funds made net purchases of technology stocks in the US stock market at the fastest speed in about five months last week, and the S&P 500 index also recorded its best performing week in 2024, closing at around 5,100 points.

Editor/Jeffrey