Third Level’s billionaire boss shortly shifted gears with AT&T and has continued to pile into Wall Avenue’s preeminent AI inventory for a second consecutive quarter.
Knowledge is the gasoline that retains Wall Avenue’s engine working. The one downside for traders is that the quantity of information they should digest may be overwhelming, which permits essential information to often slip by the cracks.
A little bit over three weeks in the past, on Aug. 14, institutional traders with at the very least $100 million in property below administration had been required to file Kind 13F with the Securities and Change Fee — and traders may need missed these filings. A 13F offers a concise snapshot of which shares, exchange-traded funds (ETFs), and choose choices Wall Avenue’s savviest fund managers bought and bought within the newest quarter (on this occasion, the second quarter).
Though 13Fs aren’t excellent — they will present outdated info for energetic hedge funds — they may also help clue traders into the shares and tendencies piquing the curiosity of Wall Avenue’s most-successful traders. This contains Third Level’s billionaire chief Dan Loeb.
Picture supply: Getty Photographs.
As of the midpoint of 2025, Loeb was overseeing 51 securities equating to greater than $7.6 billion in market worth. Whereas he is identified for getting off-the-radar firms within the small- and mid-cap area, it is his buying and selling exercise in high-profile companies that actually stood out within the June-ended quarter.
Particularly, Loeb bid adieu to high-yield telecom inventory AT&T (T -0.05%) within the second quarter, whereas almost doubling his fund’s stake within the firm powering the evolution of synthetic intelligence (AI).
Third Level’s Dan Loeb disconnects from AT&T
Throughout the June-ended quarter, Third Level’s 13F reveals Loeb decreased 12 positions and kicked 10 fully to the curb. The headline-grabbing exit must be the three,775,000 shares of AT&T that got the boot.
Essentially the most logical of all explanations for Loeb disconnecting from AT&T has to do with easy profit-taking. The common safety in Loeb’s fund has been held for lower than 15 months, which alerts that Third Level’s billionaire investor is not afraid to lock in features when introduced with the chance.
Extra importantly, Loeb’s buying and sale historical past with AT&T tells fairly the story. He oversaw the acquisition of all 3,775,000 shares in the course of the first quarter, and bought each share within the subsequent quarter. Given the tariff and commerce uncertainty that arose within the first quarter, safe-haven, high-yield dividend shares like AT&T had been widespread investments. However with progress shares taking maintain since mid-April, Loeb seems to be shifting his focus away from safer investments and towards firms that supply extra upside alternative.
Moreover, Third Level’s billionaire boss may need been turned off by AT&T’s valuation. With the inventory market at its third-priciest valuation when back-tested 154 years, pointing to AT&T’s ahead price-to-earnings (P/E) ratio of 13.3 is likely to be a head-scratcher. Nonetheless, AT&T’s low single-digit progress charge, coupled with its common ahead P/E a number of of 8.3 over the trailing-five-year interval, recommend it is comparatively expensive.
Although AT&T’s upside is likely to be considerably restricted after its shares greater than doubled from their summer time lows in 2023, there are nonetheless ample causes for remaining shareholders to be optimistic. Particularly, administration has finished a bang-up job of enhancing steadiness sheet flexibility. Spinning off content material arm Time Warner in April 2022, and utilizing working money movement to organically scale back debt, has given AT&T the power to go on the offensive.
AT&T’s core operations are demonstrating regular progress, as nicely. Whereas AT&T is rarely going to match the expansion potential of huge tech firms, the growth of 5G wi-fi networks has led to a predictable improve in high-margin wi-fi information consumption.
Likewise, the corporate has loved a resurgence in web broadband additions due to the increasing availability of 5G obtain speeds. Broadband might not be the expansion story it was 1 / 4 of a century in the past, however it will possibly generate ample working money movement and encourage high-margin service bundling for AT&T.
Picture supply: Getty Photographs.
Billionaire Dan Loeb piled into this sensational AI inventory for a second straight quarter
On the different finish of the pendulum, Loeb added 16 new securities to his fund within the second quarter, in addition to elevated his stakes in 13 present holdings. Arguably none of those purchases is extra of an eyebrow-raiser than preeminent AI inventory, Nvidia (NVDA -2.78%).
Between July 1, 2023, and Dec. 31, 2024, Third Level had no publicity to Nvidia. However over the primary two quarters of 2025, Loeb has overseen the acquisition of 1,450,000 shares (March-ended quarter) and 1,350,000 shares (June-ended quarter) of Nvidia inventory. In simply six months, it is grow to be the fund’s third-largest holding.
One of many catalysts which will have enticed Third Level’s billionaire investor to make the leap is Nvidia’s separate pullbacks within the first and second quarters. The DeepSeek scare in January, adopted by the aforementioned inventory market swoon attributable to the revealing of President Donald Trump’s tariff and commerce coverage in early April, gave traders of all walks, together with billionaire cash managers, a chance to leap into Nvidia inventory at an (in hindsight) engaging worth.
Dan Loeb may additionally be maintaining issues easy by piling into the clear chief in AI {hardware}. Nvidia’s Hopper (H100), Blackwell, and next-generation Blackwell Extremely graphics processing models (GPUs) are anticipated to account for the majority of GPUs deployed by companies in high-compute information facilities. Nvidia is in no hazard of dropping its spot atop the market share pedestal.
Third Level’s boss is probably impressed by Nvidia’s potential to retain its purchasers, as nicely. The corporate’s CUDA software program platform is what builders use to maximise/customise their Nvidia GPUs. This toolkit has been an anchor that is stored purchasers loyal to the model.
There is a excessive ceiling related to the AI revolution, too. Nvidia with the ability to, as soon as once more, export AI chips to China, opens new channels of income and offers it an affordable shot at sustaining a 20% to 30% annualized progress charge.
The largest subject with Loeb’s newfound love for Nvidia inventory is likely to be historical past. There hasn’t been a game-changing technological innovation in over three a long time that is managed to keep away from an early stage bubble-bursting occasion. Since most companies have not but optimized their AI options or discovered how one can generate a constructive return on their AI investments, there is a real chance of an AI bubble forming and popping. It this had been to occur, Nvidia inventory would take it on the chin.
Moreover, it is tough to miss the aggressive strain Nvidia is contending with. Regardless of sustaining clear compute benefits, lots of its high prospects by web gross sales are internally growing AI-GPUs to make use of of their information facilities. These significantly cheaper and available chips can simply price Nvidia useful information heart actual property within the quarters and years to come back.
