Billionaire Dan Loeb Sells Amazon and Microsoft, But Buys This Magnificent Seven Stock

Dan Loeb is a notorious "mover" and "shaker" in the investment world. He founded the New York-based hedge fund Third Point in 1995, which now manages about $11.5 billion. According toForbes.Lebron's net assets were reported to be US$3.3 billion.

This activist investor made some adjustments to his hedge fund's portfolio in the fourth quarter of 2023. Le announced that it reduced its holdings ofAmazon (NASDAQ: AMZN)respond in singingMicrosoft (NASDAQ: MSFT)The billionaire investor, however, has bought shares of another "Magnificent Seven". However, the billionaire investor bought another "Magnificent Seven" stock.

Profit-taking

LeBlanc sold 210,000 shares of Microsoft stock in the fourth quarter. Although this reduced Third Point's stake in the tech giant by more than 9.4%, Microsoft remains the second largest holding in the hedge fund's portfolio.

The billionaire investor has held Microsoft on and off since 2006. His most recent stake is in the fourth quarter of 2022, just as OpenAI launches ChatGPT in time for the AI wave. Microsoft is a major beneficiary of this wave due to its partnership with OpenAI.

Third Point first took a position in Amazon stock at the end of 2019 and will hold it through the second quarter of 2022. Loeb's wait-and-see time on the e-commerce and cloud services leader is not long. He opened a new position in Amazon in the second quarter of 2023. Although he reduced Third Point's stake by nearly 10.3% in the fourth quarter of 2023, Amazon remains the hedge fund's third-largest holding.

Why did Loeb cut his positions in Amazon and Microsoft? The most likely reason is that he wants to take profits. Both of these stocks have risen dramatically in the last year.

Increase your bet on Meta

As much as Koon's investment in the two "Magnificent Seven Samurai" stocks has cooled off, he's not sure about theMeta Platforms (NASDAQ resonance stock code: META)The hedge fund manager increased Third Point's stake in Meta by nearly $55% in the fourth quarter of 2023. The hedge fund manager increased Third Point's stake in Meta by nearly 5.5% in the fourth quarter of 2023. The value of the $410.6 million position makes Meta Third Point's sixth-largest holding at the end of 2023.

Loeb's history with Meta dates back to the second quarter of 2016, when he first bought the stock. He held the social media company's stock for a little over two years before exiting his position. The activist investor bought Meta again in the second quarter of 2020 and held the stock until the fourth quarter of 2021, and in the third quarter of 2023, Loeb took another stake in Meta.

Like Amazon and Microsoft, Meta has enjoyed the dividends of artificial intelligence over the last year. But I suspect that's not the main reason why Loeb increased his stake in the stock. My hunch is that Loeb likes Meta's approach to improving profitability.

These efforts are paying off. in the fourth quarter of 2023, Meta's earnings more than tripled year-over-year. For the full year, profits jumped 69%.

Is Lebron's statement correct?

In a sense, Loeb is hitting three birds with one stone in this "Magnificent Seven" deal. Loeb's decision to increase Third Point's stake in Meta is already paying off. Since the end of 2023, Meta shares have surged more than 45%, but Amazon and Microsoft are also up double digits so far this year. LeBeau could have made even more money by owning shares in both companies.

However, reducing positions in Amazon and Microsoft may still be the right choice for Loeb. Both stocks make up a relatively large portion of Third Point's portfolio. You can't blame any investor for wanting to make sure their holdings aren't overly concentrated in a few stocks.

Over the long term, I think Lebron and other investors will benefit from owning shares in all three companies. Amazon and Microsoft's cloud computing businesses should continue to grow strongly, thanks in large part to artificial intelligence. I like Meta's smart glasses, which focus on business messaging and have a built-in AI assistant. I predict that Amazon, Microsoft and Meta will remain glorious for a long time to come.

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John Mackey, former Chief Executive Officer of Whole Foods Market, an Amazon subsidiary, is a member of the Board of Directors of The Motley Fool. Randi Zuckerberg, former Director of Mass Development and Spokeswoman for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool. Keith Speights has worked at Amazon, Meta Platforms and Microsoft. Keith Speights works for Amazon, Meta Platforms, and Microsoft. The Motley Fool owns and recommends shares of Amazon, Meta Platforms, and Microsoft. The Motley Fool recommends the following options: Long Microsoft January 2026 $395 Calls and Short Microsoft January 2026 $405 Calls. The Motley Fool has a disclosure policy.

Billionaire Dan Loeb Sells Amazon and Microsoft, But Buys This 'Magnificent Seven' Stock was originally published by The Motley Fool.