As of September 30, Ken Griffin, founder and CEO of Citadel, the world’s most successful hedge fund, had a portfolio worth $518.30bn, up from a value of $494.03bn at the end of June. The number of holdings fell slightly from 14,128 to 14,115. Here are some of the highlights from Citadel’s latest 13F form.
Palantir Stake Slashed
Palantir [PLTR] has been a breakout name in the artificial intelligence (AI) theme this year, with its share price rocketing 345.65% in the 12 months to December 6.
Nevertheless, Griffin decided to dump 91% of his stake in Q3, offloading approximately 5.17 million shares. The holding is currently worth $18.90m, a minuscule fraction of the portfolio’s total value.
There were increases in put and call options of 5% and 30%, respectively, to hedge against the remaining common stock held.
A possible explanation for the reduction could be Palantir’s sky-high valuation. It is currently trading at 51.67 times forward sales and 167.89 times forward earnings.
The move could be an indication that Griffin believes the stock’s red-hot streak may cool in the near term.
He also increased call options in SoundHound AI [SOUN] by 166% to approximately 2.12 million shares, while increasing put options by 13%, taking the total to 1.07 million shares. No common stock was held as of September 30. SoundHound, a conversational voice AI company, has seen its share price surge 614.76% in the past year.
Chip Stakes Raised
Citadel nearly tripled its position in GPU giant Nvidia [NVDA] in Q3, the biggest quarterly increase since Q4 2022, adding approximately 4.70 million shares. Put and call options were reduced by 22% and 20% to 28.03 million and 29.83 million shares, respectively.
The significant increase came after the firm sold approximately 33.88 million shares across the previous two quarters. Griffin may have decided to take some profit in the first half of the year and then buy more after the Nvidia share price pulled back during July and August, although there is no way of knowing exactly what price he bought the stock for.
Griffin also boosted his stake in Nvidia partner Accenture [ACN] by 291% with the addition of 787,027 shares. Both put and call options were reduced during the quarter, by 16% and 31%, respectively.
These transactions occurred before Accenture and Nvidia announced an expansion of their partnership in the early part of Q4. Accenture has launched the Nvidia Business Group, which will train 30,000 employees on Nvidia’s tech stack so that they can help clients get to grips with the chipmaker’s AI Enterprise, AI Foundry and Omniverse platforms.
Griffin’s stake in Advanced Micro Devices [AMD] was raised by 170% to approximately 1.22 million shares. Put options were reduced by 18%, while call options increased by 3% to approximately 12.34 million and 15.16 million, respectively.
He also more than doubled his Intel [INTC] holding, buying approximately 11.67 million shares in Q3. The increase follows the addition of 1.36 million and 1.76 million in the previous two quarters.
While Intel put and call options increased by 34% and 65%, respectively, the number of shares being scooped up could be a bullish sign that Citadel believes the beleaguered chipmaker can turn things around.
The 13F for Q4, which will be filed in February, could give an indication as to whether Griffin has continued to buy or has been selling following the sudden departure of Pat Gelsinger earlier this month. Some analysts believe the leadership change will see Intel abandon its unprofitable foundry business, which they argue could be good for margins.
Big Biotech Bet
One of the many new entrants to Citadel’s portfolio during Q3 was California-based biotech Summit Therapeutics [SMMT] with the purchase of 650,833 shares. Stockcircle data shows Griffin was the only ‘super investor’ to have bought into the stock during the quarter.
Griffin has been in and out of Summit since Q1 2022 and the highest number of shares held before Q3 this year was approximately 56,700. The reason why he has suddenly decided to go big on the stock could the promising findings of a study published in early September.
The study has shown the biotech’s experimental lung cancer drug candidate, ivonescimab, can offer better survival rates than Merck’s [MRK] pembrolizumab, which is sold as Keytruda.
To put into context how big an opportunity this could be for Summit, Keytruda sales were up 17% to $7.4bn in Q3, accounting for 44.31% of Merck’s total sales of $16.7bn.
Given the risky nature of biotech stocks and drug development, it is perhaps no surprise that Griffin is hedging his exposure, increasing his put options by 599% to 392,300. Call options were increased by 128% to 183,600.
Other Significant Moves
Another notable move during Q3 was the sale of 90% of its Apple [AAPL] common stock, offloading approximately 4.91 million shares.
Griffin had bought approximately 2.64 million shares in Q2, possibly as an AI play — the Cupertino company announced its generative AI capabilities, Apple Intelligence, in June. He may have decided to cut his stake following delays to Apple Intelligence’s rollout. Apple put and call options were increased by 20% and 9%, respectively, in Q3.
Citadel’s Salesforce [CRM] holding was also slashed by 90% to 31,284 shares. Put and call options were reduced 12% and 38%, respectively.
Its Pinterest [PINS] stake was reduced by 60% to 1.78 million shares. However, this comes on the back of a 34,646% increase in the holding in Q2. Put and call options were increased by 43% and 123%, respectively, in Q3.
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