L1 Capital, an investment management company, released its “L1 Long Short Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. The fund outperformed the S&P ASX200 AI benchmark and returned -10.4% (net) in the second quarter. Global markets fell sharply over concerns of recession during the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
L1 Capital discussed stocks like Shopify Inc. (NYSE:SHOP) in the second quarter investor letter. Headquartered in Ottawa, Canada, Shopify Inc. (NYSE:SHOP) is a Canada-based e-commerce platform and services provider. On September 20, 2022, Shopify Inc. (NYSE:SHOP) stock closed at $30.95 per share. One-month return of Shopify Inc. (NYSE:SHOP) was -7.03%, and its shares lost 78.89% of their value over the last 52 weeks. Shopify Inc. (NYSE:SHOP) has a market capitalization of $39.256 billion.
Here is what L1 Capital specifically said about Shopify Inc. (NYSE:SHOP) in its Q2 2022 investor letter:
“Shopify Inc. (NYSE:SHOP) (Short -54%) shares collapsed further during the quarter on broader weakness in the ecommerce market as well as Amazon’s launch of ‘Buy with Prime’, which allows merchants to sell through Amazon on their own websites. Shopify enables small and medium size businesses to easily manage an online shopfront. We started shorting the company at ~US$136 per share in December 2021, closing it out at the end of April around US$42-43 per share (prices quoted are post a 10-for-1 stock split that was effective 29 June). Shopify was a significant ‘COVID winner’ as numerous businesses were forced to open online stores (driving up subscriptions) and consumers shopped more online (driving up payment volumes). Our view was that despite some demonstrable strengths, the company had become significantly overvalued with the market underestimating the risks around slowing growth as economies re-opened, as well as increased competition from ecommerce players and well-funded copycat platforms. In addition, Shopify, like many ultra-high P/E stocks, has also de-rated as a result of higher bond yields which essentially reduce the present value of ‘long duration’ cash flows (that are many years or decades in the future).”
Shopify Inc. (NYSE:SHOP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held Shopify Inc. (NYSE:SHOP) at the end of the second quarter which was 72 in the previous quarter.
We discussed Shopify Inc. (NYSE:SHOP) in another article and shared Baron Funds’ views on the company. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.
Disclosure: None. This article is originally published at Insider Monkey.
When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.
Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.
At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.
Do the math. According to Musk, this technology could be worth $250 trillion by 2040.
Put another way, that’s roughly equal to:
175 Teslas
107 Amazons
140 Metas
84 Googles
65 Microsofts
And 55 Nvidias
And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.
It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.
Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.
How could anything be worth that much?
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In fact, Verge argues this company’s supercheap AI technology should concern rivals.
Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.
Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.
When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.
Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…
But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.
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