The third quarter of 2023 brought fascinating shifts in Steven Cohen’s investment strategy at Point72 Asset Management. The $39 billion hedge fund made two bold moves that caught Wall Street’s eye – pumping up its Nvidia stake while walking away from Amazon entirely.
Cohen’s team at Point72 bought 1,574,796 additional Nvidia shares, boosting their position by 74%. According to the source document, while many billionaire money managers sold Nvidia shares to lock in gains, Cohen’s fund went against this trend. Nvidia held 98% of AI-GPU shipments to data centers through 2022 and 2023, according to Tech Insights data. The company’s H100 “Hopper” chips were selling for $30,000 to $40,000 each, commanding 100-300% premiums over rival products.
The money tells the story – Nvidia’s gross margins hit 70-75% as demand for these chips far outpaced supply. The company’s CUDA software kept customers locked into its ecosystem, while orders piled up for both current H100 chips and the upcoming Blackwell architecture.
But Cohen took a completely different view on Amazon, selling all 3,163,439 shares. The math behind this move? Amazon traded at 43 times earnings with a $2.1 trillion market cap. Looking at 153 years of market history, the S&P 500’s current Shiller P/E ratio sits at its third-highest bull market level ever. Past patterns show stocks typically need time to grow into trillion-dollar valuations.
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The Amazon sale comes despite the company’s strong market position. Recent Canalys data shows Amazon Web Services holding 33-35% of global cloud infrastructure spending. The core e-commerce business keeps driving Prime membership growth, while its advertising arm expands. By 2025 projections, Amazon trades at 13 times cash flow – well below its historical range of 23–37 times.
Market watchers point out potential risks to Nvidia’s position. Nearly all of Nvidia’s top customers by net sales – many of which are members of the “Magnificent Seven” – are internally developing AI GPUs for their data centers. History shows new technologies often face early corrections – the internet boom and bust comes to mind. Competition in AI chips keeps ramping up, while supply chains can affect pricing power.
Cohen described AI as a “big wave” during a recent conference, predicting both job creation and elimination. His Q3 moves reflect this sentiment – increasing investment in AI infrastructure while exiting from a tech giant at current valuations. The market continues to watch these positions as the AI sector evolves.
