Billionaire George Soros just sold this top semiconductor stock

Soros Fund Management appears to have missed a big tech stock rally.

Feb 15, 2024 - 20:30

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Billionaire George Soros just sold this top semiconductor stock

Soros Fund Management, the investment vehicle founded by the billionaire investor George Soros, unveiled a host of changes to its U.S. equity holdings late Wednesday, including the surprise sale of an emerging chipmaker.

Investment funds with more than $100 million in assets are required to notify the Securities and Exchange Commission regarding changes in the their portfolios.

The reports, known as 13-F filings, are backdated to the end of the previous quarter, and while they do not include the full scope of holdings, nor possible bets against a particular security, they do provide a glimpse into the strategies of some of the world's biggest investors.

Soros, who uses the fund as part of his Open Society Foundation's efforts to improve government transparency worldwide, is perhaps Europe's foremost investor, with personal wealth estimated at around $6.7 billion.

George Soros has recently handed control of the Open Society Foundations charity to his 37-year old son, Alex.
Nelson Ching/Bloomberg via Getty Images

Soros Fund Management, with assets under management of around $5.26 billion at the end of last year, gained around 10.3% over the three months ended in December, lagging the 12.8% gain recorded by the S&P 500.

Soros may be taking a back seat to son Alex

The 93-year old has also handed control of the Open Society Foundations to his 37-year old son, Alex, who has instituted a major restructuring of the $25 billion network. The revamp incudes deep staffing cuts and a pullback in donations.

The Fund's investments, however, continue to intrigue Wall Street, and the 13-F filed late Wednesday notes the sale of its entire stake in Arm Holdings, the chipmaker owned by Japan's SoftBank, sometime during the fourth quarter.

Soros Fund Management told the SEC it had built a 325,000-share stake in Arm over the third quarter, a position that represented just 0.2% of its entire holdings.

It was unclear from the filing whether the position was taken before or after the group's $5 billion IPO in mid-September, but the overall stake was valued at around $17.4 million.

Arm sold 95.5 million shares at $51 each in the Nasdaq listing, raising around $4.87 billion, with SoftBank (SFTBY) still holding around 90.6% of Arm's ordinary shares.

The pricing made Arm's listing the biggest IPO since Rivian Automotive (RIVN) in 2021, but it still represented a significant reduction to the $64 billion valuation Arm carried earlier in the year.

That assessment was based on SoftBank's arrangement to buy the 25% stake in the chipmaker that it didn't directly own from Saudi Arabia-backed Vision Fund.

Soros may have missed a surge in Arm shares

Arm shares were a solid advancer following its mid-September debut, rising 21.1% over the next five months compared with a 13.1% gain for the Nasdaq. But it also lagged the gains of chip-sector rivals such as Nvidia, Advanced Micro Devices (AMD) and Broadcom (AVGO) .

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The fund may have also missed the stock's mid-February surge, which saw the stock rise more than 64% over the past seven days, following its better-than-expected fourth-quarter-earnings update.

Arm Holdings, which designs chipmaking blueprints and earns the bulk of its revenue from royalty payments, also sells semiconductors that support Nvidia's (NVDA) AI-focused data-center chips.

Nvidia has been the standout market performer this year, regardless of sector, adding more than $560 billion – nearly the entire value of Tesla (TSLA) – to its market cap and rising just under 50% from late December.

A surge in artificial-intelligence investment, particularly from the so-called hyperscalers, or large cloud-computing-service providers, has accelerated interest in Nvidia, given its dominant market position in the chips that drive AI technologies.

Cambridge, U.K.-based Arm Holdings said fiscal 2024 revenue would grow 19% to around $3.1 billion with earnings rising to $1.22 a share.

Arm Holdings ARM shares were marked 1.9% higher in premarket trading Thursday, indicating an opening bell price of $128.82 each. Such a move would peg the stock's market value at around $132.5 billion.

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