Billionaire Ken Griffin, the founder and CEO of Citadel Advisors, leads the most profitable hedge fund ever, according to LCH Investments. Investors often keep an eye on his trades through quarterly Forms 13F.
In Q2, Griffin sold 9.2 million shares of Nvidia (NVDA 0.78%), cutting his stake by 79%. He increased his investment in Super Micro Computer (SMCI -0.68%) by 96%, buying 98,752 shares. Citadel still holds more in Nvidia than Supermicro, but these moves may indicate a shift in views about the companies.
Nvidia
Nvidia is a leader in GPUs, essential for AI and data center tasks. It holds about 90% of the AI chip market, and experts believe it will continue leading for the next few years due to its quality products and comprehensive support ecosystem.
Despite Griffin selling shares when Nvidia’s valuation was high (around 67 times earnings), the stock is now a bit cheaper, trading at 64 times earnings. Analysts expect 37% annual earnings growth over the next three years, making Nvidia a more attractive buy now, possibly leading Griffin to re-invest since Q2.
Super Micro Computer
Super Micro Computer specializes in servers and aims to bring new technologies to market quickly, positioning itself well in the AI server space. Its direct liquid cooling technology could help it maintain a competitive edge.
Although Supermicro saw a 143% revenue increase recently, its gross margins fell, raising concerns about profitability. Adding to these challenges, short-seller Hindenburg Research made accusations of accounting irregularities against the company, which Supermicro has disputed but has not fully resolved.
Recent regulatory scrutiny and past issues raise risks for investors. Despite projected strong growth in the AI server market, these problems might have caused Griffin to reduce his stake in Supermicro since Q2.
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