Ken Griffin of Citadel Advisors simply scooped up 11 million shares of a semiconductor inventory not named Nvidia.
Hedge funds usually have a status for being tight-lipped about their investing strikes, hardly ever providing a lot perception to retail traders. Nevertheless, as soon as each quarter, institutional cash managers are required to file a form 13F with the Securities and Change Fee (SEC) — a doc that basically outlines the entire shares their funds purchased or offered in the course of the earlier quarter, and their holdings on the finish of it.
Citadel Advisors, run by billionaire investor Ken Griffin, is among the most prestigious hedge funds on Wall Road, and whereas reviewing the 13F it filed on Nov. 14, I seen one thing. Within the third quarter, the fund elevated its stake by 172% in a semiconductor inventory that is not Nvidia.
Ought to retail traders comply with Griffin’s lead, or would they be higher off staying on the sidelines?
Citadel simply made a reasonably large assertion
Through the third quarter, Citadel considerably elevated its place in Intel (INTC 1.79%). The desk under illustrates Citadel’s stakes in Intel as of the ends of the final 5 quarters.
| Metric | Q3 2023 | This fall 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|---|---|---|---|---|---|
| Intel shares owned (in thousands and thousands) | 3.8 | 3.7 | 5.4 | 6.8 | 18.5 |
Information supply: Hedge Comply with
As the info above reveals, Citadel has been scooping up the chipmaker’s shares over the last three quarters. What’s curious, nonetheless, is the corporate’s buy of 11.7 million shares during the last three months, almost tripling its stake.
Why would possibly Citadel be bullish on Intel?
It’s well-known that one in every of President-elect Donald Trump’s major marketing campaign themes was his help for investing extra into American-made merchandise and home manufacturing. That stated, Trump hasn’t exactly endorsed President Biden’s CHIPS Act — which can put $280 billion price of presidency help behind rising the nation’s semiconductor manufacturing capability — with a glowing overview.
However, I personally do not assume Trump will attempt to change the CHIPS Act an excessive amount of after he assumes workplace in January. On the finish of the day, the CHIPS Act is doing exactly what Trump desires — incentivizing semiconductor companies to develop their manufacturing capabilities in the U.S.
And maybe no different U.S.-based chipmaker has benefited from the CHIPS Act greater than Intel. In my view, Intel can be properly positioned to obtain even more business from the federal government over the following 4 years.
Picture Supply: Getty Photographs
Is Intel inventory a purchase proper now?
As of the time of this writing, shares of Intel are down by greater than 50% this 12 months. I are inclined to see the narrative surrounding Intel as being “one step ahead, two steps backward.” Over the past a number of years, the corporate has misplaced important market share to rivals, and it hasn’t precisely been impressing potential companions with its foundry process. Most just lately, Intel was replaced in the Dow Jones Industrial Common by Nvidia.
In opposition to the backdrop of its operational stumbles, the chip big has applied quite a few cost-reduction efforts (specifically layoffs), and there have been even experiences swirling a few months in the past that Intel could be acquired. None of those components level to it being a very attractive funding prospect.
So, why would Griffin double down on Intel inventory when there are different extra prudent alternatives?
My suspicion is that Griffin thinks Intel inventory could have bottomed. And now that Trump is headed again to Washington, I might say there’s a good probability that he’ll comply with in his predecessor’s footsteps by awarding extra enterprise to Intel in an effort to assist it reignite its progress. If that is the case, Intel inventory might be poised for a pleasant bounce-back over the following 12 months.
With all this stated, Intel continues to be very a lot in a turnaround part, and it is by no means a screaming purchase. If the inventory does shift into larger gear, it is going to probably achieve this primarily based on a story of a comeback versus a notable near-term enchancment in its working outcomes. For these causes, I actually wouldn’t be shocked if Citadel flips a lot of its Intel inventory for a fast revenue moderately than holding the shares for the long term.
On the finish of the day, the chipmaker’s outlook stays fairly speculative. I might nonetheless cross on Intel for now.
Adam Spatacco has positions in Nvidia. The Motley Idiot has positions in and recommends Intel and Nvidia. The Motley Idiot recommends the next choices: brief November 2024 $24 calls on Intel. The Motley Idiot has a disclosure policy.