When a hedge fund manager running $25 billion tells you a stock isn’t expensive, it’s worth asking what math he’s using. Dan Loeb, founder of Third Point, is making that case for Nvidia, arguing that the chipmaker trades at roughly 15 times its projected 2027 earnings and just 12 times what he expects it to earn in 2028.
Loeb’s argument is straightforward: Nvidia generates substantial cash flows, unlike dot-com darlings. He describes the current AI investment environment as a “super-cycle,” still in its early innings, spanning energy infrastructure, semiconductor technology, software platforms, and end-user applications.
Third Point purchased over 1.45 million shares of Nvidia in Q1 2025, followed by another 1.35 million in Q2. The pace slowed in the second half of the year, with 50,000 shares added in Q3 and 100,000 in Q4. That’s four consecutive quarters of accumulation.
Beyond Nvidia, Third Point holds significant stakes in Microsoft, Amazon, and Google-the three hyperscalers that collectively represent the largest buyers of Nvidia chips. The Philadelphia Semiconductor Index has climbed 40% year-to-date, reflecting sustained demand for AI chips.
Loeb’s valuation argument is a bet on continued hyperscaler spending, sustained demand for AI training and inference hardware, and Nvidia maintaining its competitive moat against AMD, Intel, and custom chip efforts from its own customers.