Billionaire Steve Cohen is one of the few hedge fund managers who almost always dazzles with his outperformance and prescient bets. Cohen, who also owns The New York Mets, founded SAC Capital back in 1992, and since then through 2009 lost money only once. A Bloomberg report earlier this year said that Point72 Asset Management has been able to raise so much cash recently that it’s starting to decline external money. The fund has reportedly raised about about $12.8 billion since 2020.
Point72’s main fund returned about 11% in 2023, and 12% in the previous year.
Billionaire Steve Cohen’s Point72 Asset Management runs a highly diversified portfolio. As of the end of the March quarter, the portfolio’s net worth was over $41.2 billion, with tech stocks accounting for 17% of the total portfolio.
Billionaire Cohen’s Speed and Agility Pays Off
Unlike long-term value investors like Warren Buffett and Seth Klarman, Cohen moves with speed and adapts quickly. He’s been like this for decades. When he was in Wharton School of the University of Pennsylvania, he would often skip classes to watch stock movements at a local brokerage. He took pride in predicting stock movements based on their direction. A report by journalist Anthony Effinger explains Cohen’s agility and the results of this approach over the years:
“Cohen and one of his senior bond managers, Peter Abramenko, concluded that with subprime mortgages starting to tumble, banks were about to lose billions of dollars on home loans made during years of easy credit and rising prices. They decided to sell everything and, by mid-2008, had gotten out of most of their positions…..That June, SAC closed down the bond arm of Sigma. Three months later, Lehman failed, and the debt of financial institutions fell in price by more than 40 percent during the next six months. Had SAC held on, it would have faced punishing margin calls and might have had some of its assets stuck at Lehman, one of its prime brokers, after it declared bankruptcy.”
Cohen Begins to Focus on Macro Amid Financial Volatility
Cohen, worth over $19 billion, is yet again adapting to the quickly changing global financial landscape as investors demand steady returns. Earlier this year, it was reported that Cohen and his team is expanding macro teams at Point72 as the global economy resets to the new era of high interest rates. The report said that the fund would establish as many as 51 macro trading teams.
For this article we scanned billionaire Steve Cohen’s Q1’2024 portfolio and picked his top 10 AI stock holdings.
10. Oracle Corp (NYSE:ORCL)
Steve Cohen‘s Q1’2024 Stake: $91,400,242
Billionaire Steve Cohen’s Point72 Asset Management owns a $91.4 million stake in Oracle Corp (NYSE:ORCL) as of the end of the first quarter of 2024. This is after the fund cut its stake in Oracle Corp (NYSE:ORCL) by a whopping 67% in the period. UBS analyst Nadia Lovell recently published a list of stocks expected to ride the boom in the AI industry where the analyst expects revenue to touch a whopping $420 billion in the next three years. Oracle Corp (NYSE:ORCL) is part of the list of stocks Lovell believes investors should get exposure to profit from these trends.
Madison Sustainable Equity Fund stated the following regarding Oracle Corporation (NYSE:ORCL) in its fourth quarter 2023 investor letter:
“Oracle Corporation (NYSE:ORCL) reported a disappointing second quarter due to supply constraints. Cloud revenue was below expectations as Oracle made planning decisions to accommodate some large-scale Oracle Cloud Infrastructure (OCI) clients that take longer to bring online. We continue to believe that Oracle has a unique position in Generative AI workloads and continue to like its position and strategy.”
9. Eaton Corp Plc (NYSE:ETN)
Steve Cohen‘s Q1’2024 Stake: $91,671,522
Power management company Eaton Corp Plc (NYSE:ETN) is one of the pick-and-shovel names that are getting a boost thanks to the AI revolution. As more and more companies deploy data centers to power their AI software, the demand for sustainable power solutions is rising, helping company like Eaton Corp Plc (NYSE:ETN).
Bank of America recently said in a note that data centers, manufacturing and AI would cause demand growth from an “already-tight electrical grid.” BofA analysts believe solar and wind energy cannot meet this growing appetite and investors are currently incorporating energy sources that might not be there in the future. To profit from this growing energy demand, BofA recommended some stocks, and Eaton Corp Plc (NYSE:ETN) was one of them.
ClearBridge Sustainability Leaders Strategy made the following comment about Eaton Corporation plc (NYSE:ETN) in its Q3 2023 investor letter:
“While renewable stocks have come under pressure of late, energy efficiency and decarbonization remain strong drivers for our industrials holdings, where Eaton Corporation plc (NYSE:ETN) and Trane Technologies (TT) were strong contributors. Eaton, whose electrical equipment enables the electrification of the power grid and electrical vehicle charging infrastructure, is benefiting from tax incentives supporting clean energy, growth in reshoring and expanding manufacturing in North America and the need for grid resiliency amid broad demand for electrification.”
8. Meta Platforms Inc. (NASDAQ:META)
Steve Cohen‘s Q1’2024 Stake: $102,706,483
Billionaire Steve Cohen decreased his fund’s stake in Meta Platforms Inc. (NASDAQ:META) by 79% in the first quarter of 2024, ending the period with an $102.7 million stake in Meta Platforms Inc. (NASDAQ:META). Meta Platforms Inc. (NASDAQ:META) is deploying AI in its backend systems and algorithms to increase engagement and growth. We talked in detail about how Meta Platforms Inc. (NASDAQ:META) is leveraging AI in our article titled Is Meta Platforms the Best AI Stock Pick of Billionaire Stanley Druckenmiller?
UBS recently published a report recommending some AI stocks to buy that would benefit from the estimated rise in spending on AI. UBS believes AI adoption is still in its early stage with just about 5% companies using generative AI. However, the firm expects AI monetization and usage to rise dramatically in the future. Meta Platforms Inc. (NASDAQ:META) is one of the stocks UBS recommended investors to ride the AI boom.
Patient Capital Opportunity Equity Strategy stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its first quarter 2024 investor letter:
“Meta Platforms, Inc. (NASDAQ:META) was a top contributor in the first quarter gaining another 37.5%. Performance has been supported by strong top and bottom-line growth as the company maintains its leadership in the advertising space, despite Reels still being under monetized versus Newsfeed and Stories. The company continues to return cash to shareholders, increasing their buyback program by another $50B in February (6.4% of shares outstanding), and announcing their first dividend of $0.50 per share (0.39% yield). The company trades at 25x this year’s earnings, which we do not view as too demanding for a company with some of the best AI assets, an improving topline that should lead to free cash flow outperformance and continued capital return.”
7. Nvidia Corp (NASDAQ:NVDA)
Steve Cohen‘s Q1’2024 Stake: $228,063,965
Nvidia Corp (NASDAQ:NVDA) has once again smashed Wall Street estimates with its numbers. In the first quarter Nvidia Corp’s (NASDAQ:NVDA) EPS came in at $6.12, versus the Street’s estimate of $5.59. Revenue totaled $26.04 billion, much higher than the estimated $24.65 billion. In the second quarter Nvidia Corp (NASDAQ:NVDA) expects revenue of $28 billion, while analysts were expecting Q2 revenue at $26.61 billion. Nvidia Corp (NASDAQ:NVDA) has also announced a 10-to-1 stock split.
Steve Cohen decreased his stake in Nvidia Corp (NASDAQ:NVDA) by 55% in the first quarter of 2024, ending the quarter with a $228 million stake in Nvidia Corp (NASDAQ:NVDA).
Patient Capital Opportunity Equity Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its first quarter 2024 investor letter:
“This quarter we entered two new positions, while exiting four positions. Our first new position was NVIDIA Corporation (NASDAQ:NVDA), which we bought early in the quarter. Nvidia is the market leader in designing and selling Graphics Processing Units (GPU), which has recently benefited from the insatiable demand of artificial intelligence (AI) models. The company currently captures 92% market share of data center GPUs and grew revenue, earnings and FCF an astounding 126%, 392%, and 610%, respectively, over the last year. While much of the focus is on Nvidia’s market cap reaching $2.3T, up 230% over the last year, the company’s valuation has actually come down over that period. As of 3/31/23, consensus was valuing the company at 61x forward EPS. This compares to today, where the company is being valued at 37x. While yes, we have never seen a company expand their market cap by so much so quickly, we have also never seen a company grow their fundamental earnings and cash generation so quickly (and which is actually expanding faster than valuation). While competitors are working to enter the GPU space, Nvidia has created a moat around their GPUs with their CUDA software offering. While we do expect the large cloud players to continue to move into the market, we think NVDA can continue to demand top market share. With leading edge technology, an increasing innovation cycle and strong cash generation, the company is well positioned for the increased adoption of accelerated computing and artificial intelligence (AI).
Nvidia Corp. (NVDA) was a top performer in the quarter gaining 82.5% in the period. While the company has had an impressive run, gaining 242% over the last year, the valuation has been supported by the impressive growth in Revenue (126%), EPS (392%) and free cash flow (610%) over the last year. The company has solidified its position in the GPU space supported by its proprietary software CUDA. While we expect competition to increase, we think NVDA can continue to maintain top market share. With leading edge technology, an increasing innovation cycle and strong cash generation, the company is well positioned for the increased adoption of artificial intelligence (AI).”
6. ASML Holding NV (NASDAQ:ASML)
Steve Cohen‘s Q1’2024 Stake: $250,626,789
Billionaire Steve Cohen’s Point72 Asset Management upped its stake in ASML Holding NV (NASDAQ:ASML) by 14% in the March quarter, concluding the period with a $251 million stake. ASML Holding NV (NASDAQ:ASML) has a near monopoly in the semiconductor industry as it machines are used by chip manufacturers to make physical chips.
ASML Holding NV (NASDAQ:ASML) supplies ultraviolet lithography photolithography machines used to manufacture advanced 3nm and 5nm chips. Jim Kelleher of Argus has set a $1,000 price target on the stock. Over the past one year ASML Holding NV (NASDAQ:ASML) shares have gained about 35%.
Polen International Growth Strategy stated the following regarding ASML Holding N.V. (NASDAQ:ASML) in its fourth quarter 2023 investor letter:
“Netherlands-based ASML Holding N.V. (NASDAQ:ASML) and Japan-based Lasertec play dominant roles within different segments of the global semiconductor industry. In both cases, shares rallied significantly in the fourth quarter of 2023, prompting our positions to grow as a percentage of the overall portfolio. We believe both companies will see demand for their products as extreme ultraviolet (EUV) lithography and soon high-numerical aperture lithography must be utilized to manufacture the world’s smallest chips. However, in our estimation, 2024 could deliver a year of less exciting growth for the semiconductor industry, which prompted us to trim these positions back.”
5. Alphabet Inc. (NASDAQ:GOOG)
Steve Cohen‘s Q1’2024 Stake: $258,046,983
Alphabet Inc. (NASDAQ:GOOG) has become a top horse in the AI race, albeit with reactive approach, as Alphabet Inc. (NASDAQ:GOOG) continues to unleash AI features in its products. Steve Cohen increased his stake in Alphabet Inc. (NASDAQ:GOOG) by 443% in the first quarter of 2024, concluding the period with a $258 million stake in Alphabet Inc. (NASDAQ:GOOG).
Bronte Capital Amalthea Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its first quarter 2024 investor letter:
“Our biggest position is Alphabet Inc. (NASDAQ:GOOG), the holding company for Google. It is currently about 12 percent of funds under management. This has been a large position for over ten years.
We bought a large position in Google in October 20104, and the stock immediately dropped 11 percent.
That was an astonishingly good purchase and if we had held it all from October 2010 until the end of this month the gain would have been about 1300 percent.
Alas we did not hold it all. We have trimmed it many times – and it is now merely a large position. (We have lived to regret every single trim…)..” (Click here to read the full text)
