Billionaire Jeff Yass’ Susquehanna has cut its position in Nvidia by 73% and is buying other artificial intelligence (AI) chip stocks like there’s no tomorrow

Jeff Yass is the co-founder of Susquehanna International Group (SIG), an institutional money management firm. SIG specializes in quantitative trading and holds positions across many major technology stocks.

While analyzing SIG’s latest 13F filing, I noticed something interesting. So during the second quarter, the fund sold 52 million shares of Nvidia stock. (NVDA -1.42%) –Reducing position in major semiconductor company by approximately 73%.

At the same time, SIG increased its stake in Micron Technology. (MU -1.85%) 271% — Purchased 3.5 million shares.

Below, I’ll detail why I think it makes sense to trade Nvidia for Micron right now, and more importantly, Micron could be a better opportunity in the long run. argue the reason.

Why sell NVIDIA stock now?

Nvidia is a child of the chip industry, driven by record growth in graphics processing units (GPUs). In fact, GPUs are a critical infrastructure in generative AI development, and Nvidia is widely considered to have the best offering on the market.

Still, if I were Nvidia, I wouldn’t rest on my laurels. Many of the company’s customers, including Microsoft, Alphabet, Tesla, Meta Platforms, and Amazon, have made significant investments in their chip infrastructure. The introduction of more GPUs into the market makes Nvidia’s growth prospects much harder to predict.

I don’t know how much Nvidia will be affected by competition, but I think it’s fair to say that the pace of Nvidia’s revenue and profit growth will slow. This challenge may have led some of Wall Street’s brightest minds, including Citadel’s Ken Griffin and DE Shaw’s David Shaw, to lower their positions at Nvidia in recent days. I think

Nvidia should remain a leader in the AI ​​space for years to come, but I’m wary of the stock’s long-term potential after a 227% rally over the last year.

Image source: Getty Images.

Why invest in Micron now?

I’ll readily admit that Micron’s financials are difficult to understand. The company’s earnings trends have noticeable peaks and troughs. On the other hand, Micron’s profitability profile clearly has not yet reached a point of maturity.

MU Revenue (Quarterly) Data by YCharts

Despite these financial discrepancies, I see Micron as a particularly good bet in the long-term AI story.

Micron specializes in memory and storage solutions. This is a very important feature related to the development of large-scale language model (LLM) training and generative AI applications. As major cloud providers such as Amazon, Microsoft, Oracle, and Alphabet continue to invest heavily in data center infrastructure and their own chips, demand for memory solutions should surge significantly.

Considering that many of these IT architecture projects take years to build and realize, Micron is well-positioned to benefit in the coming years.

the future looks bright

At the end of the day, I still think it’s a smart move to keep some exposure to Nvidia. The company’s upcoming Blackwell series GPUs should serve as a meaningful catalyst for at least the next year.

However, it’s hard to know what will happen to Nvidia’s growth as the competitive landscape begins to come into focus.

In contrast, Micron has yet to reach its full potential with AI tailwinds. Over the long term, Micron could be a multibagger opportunity as revenues start to accelerate at a more steady pace and profits start to expand.

I think Susquehanna’s decision to reduce his position in Nvidia and lock in profits while also buying Micron stock is a particularly wise move that will definitely pay off in the long run.