Billionaire Dan Loeb of Third Point Ditched High-Yield AT&T for Wall Street's Most-Prized Artificial Intelligence (AI) Growth Stock

Core Insights - Third Point's Dan Loeb has shifted his investment strategy, selling off AT&T shares while increasing his stake in Nvidia, a leading AI stock, for the second consecutive quarter [5][15]. Investment Activity - Loeb's fund reduced 12 positions and completely exited 10, including 3,775,000 shares of AT&T, indicating a strategy focused on profit-taking [6][7]. - In contrast, Loeb added 1,450,000 shares of Nvidia in the March-ended quarter and 1,350,000 shares in the June-ended quarter, making it the fund's third-largest holding [15]. Company-Specific Analysis - AT&T's valuation concerns may have influenced Loeb's decision to divest, as its forward P/E ratio of 13.3 appears high compared to its low growth rate [9]. - Despite the divestment, AT&T has shown steady growth in core operations, particularly in high-margin wireless data consumption and broadband services [11][12]. Market Trends - Nvidia's strong market position in AI hardware, particularly with its GPUs, positions it well for future growth, with expectations of a 20% to 30% annualized growth rate [18]. - The AI sector presents both opportunities and risks, with potential for a bubble due to historical patterns of technological innovation [19][20].