Billionaire Ken Griffin, founder and CEO of Citadel Advisors, leads the most profitable hedge fund in history. Investors often track his trades reported in quarterly Forms 13F.

In the second quarter, Griffin sold 9.2 million shares of Nvidia (NVDA 0.78%), cutting his stake by 79%. He also bought 98,752 shares of Super Micro Computer (SMCI -0.68%), boosting his position by 96%. Although Citadel still has more invested in Nvidia, these shifts indicate changing market sentiment.

Here’s a brief overview of both companies:

Nvidia

Nvidia specializes in graphics processing units (GPUs) that power AI applications and data centers. Analysts at Forrester Research claim, “Without Nvidia GPUs, modern AI wouldn’t be possible.” Nvidia holds about 90% of the AI chip market, expected to continue for 2-3 years due to their superior technology and software ecosystem. The company’s holistic approach enables better performance with lower energy use.

While Griffin sold shares at a valuation of 67 times earnings, Nvidia’s earnings have since doubled, lowering its current multiple to 64, making the stock more appealing. Analysts project 37% annual earnings growth over the next three years, slightly up from previous estimates.

Super Micro Computer

Super Micro manufactures server solutions for data centers, with a fast-paced product development cycle. Their leadership in direct liquid cooling technology offers a competitive edge, potentially reducing energy costs by 40%. However, recent financial results show mixed signals, with revenues up 143% but margins down, suggesting tougher competition ahead.

Concerns have arisen following allegations from Hindenburg Research about accounting irregularities. Despite management’s rebuttals, investors should be cautious. Past infractions led to a fine and stock delisting, and now the Justice Department is investigating again.

Looking forward, AI server sales are expected to grow by 30% annually, with Supermicro’s earnings projected to grow 54% in the next year, making the stock attractive despite ongoing scrutiny.