Philippe Laffont's AI Stock Moves: Nvidia & CoreWeave

Philippe Laffont, the founder of Coatue Management, is known for investing in tech companies. Coatue's portfolio, valued at $22.6 billion, has major positions in Meta and Amazon.

Laffont recently sold shares of Nvidia and two other AI companies. However, he also acquired shares of CoreWeave, which is backed by Nvidia.

Laffont's Background and AI Focus

Laffont has a computer science degree from MIT and previously worked at Tiger Management. Coatue was founded in 1999. Laffont's background suggests he is well-informed about the AI market.

CoreWeave Investment

CoreWeave completed its IPO in late March, and the stock has since increased by over 160%, bringing its market value to more than $50 billion. Laffont invested in 14,402,999 shares of CoreWeave.

CoreWeave's IPO was initially considered disappointing. However, optimism about trade deals and support from Nvidia have boosted the stock. Nvidia reported a 7% stake in CoreWeave as of March 31. CoreWeave and Nvidia are connected because CoreWeave relies on demand for Nvidia's GPUs.

CoreWeave's Business Model

CoreWeave provides access to its fleet of 250,000 Nvidia GPUs, offering hourly rentals. This gives customers flexibility and access to Nvidia's AI chips. CoreWeave's revenue increased by 420% to $981 million in the recent quarter.

CoreWeave has a substantial amount of debt, with $3.8 billion in current debt and $4.9 billion in non-current debt at the end of the quarter. The company anticipates capital spending of up to $23 billion this year and expects annual revenue to be between $4.9 billion and $5.1 billion.

Investment Considerations

Laffont's moves suggest a strategy of securing profits from established AI companies and investing in a newer, growing player. Investors should consider their risk tolerance. Those seeking stability may prefer established AI companies like Nvidia, AMD, or Alphabet, which Laffont continues to hold in his portfolio. Aggressive investors may consider CoreWeave.