Billionaire Steve Cohen, a prominent figure and founder of the Point72 Asset Management, has accumulated an estimated fortune of nearly $20 billion through a high-risk/high-reward strategy. Despite negative market trends in 2022, Point72 Asset Management produced a net gain of 10.3%, netting Steve Cohen $1.7 billion in gains. Cohen is also featured in the biographical movie “Dumb Money,” which details the famous GameStop short squeeze. In the film, Cohen and other big Wall Street names like Melvin Capital Management founder Gabe Plotkin are shown as being big investors who are shorting meme stocks sitting in pandemic hideouts while retail investors gathered on social media platforms to boost meme stocks that were shorted by them.
In the movie, the hedge fund managers doubt the knowledge of retail investors. In one scene, when the fictional Cohen and Plotkin discover the videos promoting GameStop on Reddit, the fictional Plotkin questions their credibility, saying “Retail traders always lose.” Meanwhile, the Cohen character responded, “Guess these guys have decided to ignore all of the obvious secular trends.” “Or are they…illiterate?”.
It appears that Steve Cohen’s high-risk/high-reward strategy has helped his firm make significant gains so far in 2023, given that Point72’s $33 billion stock portfolio is heavily weighted towards high-growth tech, consumer discretionary, and communication companies, which were the best performers in the first half of 2023. At a private SALT conference event, Dumb Money’s Steve Cohen suggested investors bet on the “big wave” of artificial intelligence rather than focusing on a recession. He emphasized that focusing too much on the likelihood of a recession may cause investors to overlook AI investment opportunities.
Among the AI stocks in which Cohen’s firm invested heavily in the second quarter were NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT), and Adobe Inc. (NASDAQ:ADBE). Point72 increased its stake in Microsoft Corporation (NASDAQ:MSFT) by 306% to $1.8 billion, while boosting its stakes in NVIDIA Corporation (NASDAQ:NVDA) and Adobe Inc. (NASDAQ:ADBE) by 68% and 52%, respectively. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Dell Technologies Inc. (NYSE:DELL), Take-Two Interactive Software, Inc. (NASDAQ:TTWO), and Meta Platforms, Inc. (NASDAQ:META) are among the other AI stocks that Dumb Money’s Steve Cohen is betting on now.
“I’m making a prognostication — we’re going up,” he said, according to Bloomberg. “I’m actually pretty bullish.”
Aside from heavily investing in AI stocks, billionaire Steve Cohen has taken advantage of the volatility in healthcare and energy stocks during the second quarter. For instance, his firm significantly lifted its stake in Dominion Energy, Inc. (NYSE:D) by 151%, Boston Scientific Corporation (NYSE:BSX) by 96%, Intuitive Surgical, Inc. (NASDAQ:ISRG) by 119% and Zimmer Biomet Holdings, Inc. (ZBH) by 120%.
Methodology
As Steve Cohen is one of the most prominent investors and founder of one of the world’s largest hedge funds, paying attention to Point72 Asset Management’s stock portfolio can help investors choose the right stocks. The following information is based on Point72 Asset Management’s second-quarter 13F filing. We track hedge funds like Bridgewater Associates because Insider Monkey research has shown that their consensus stock picks can deliver exceptional returns.
15 Stocks Dumb Money’s Steve Cohen Is Betting On Now
15. Dominion Energy, Inc. (NYSE:D)
Value of Point72 Asset Management’s 13F Position: $185 million
Number of Hedge Fund Shareholders: 27
Dumb Money’s Steve Cohen used the selloff in Dominion Energy, Inc. (NYSE:D) stock price as a buying opportunity during the second quarter, increasing his stake in the company by 151%. Dominion Energy, Inc. (NYSE:D) operates in four segments: Dominion Energy Virginia, Gas Distribution, Dominion Energy South Carolina, and Contracted Assets. Dominion Energy, Inc. (NYSE:D) appears to be undervalued due to its low valuations and an expectation of sustainable earnings growth in the coming years. Its stock is currently trading at about 12 times forward earnings, compared to the sector median of 15 times. Dominion Energy, Inc. (NYSE:D) also offers a healthy over 6% dividend yield.
According to Insider Monkey data, Dominion Energy, Inc. (NYSE:D) was in 27 hedge fund portfolios at the end of the second quarter. Diamond Hill Capital and Citadel Investment Group were the leading stakeholders in Dominion Energy, Inc. (NYSE:D).
14. Boston Scientific Corporation (NYSE:BSX)
Value of Point72 Asset Management’s 13F Position: $188.8 million
Number of Hedge Fund Shareholders: 71
Boston Scientific Corporation (NYSE:BSX) is one of the 15 stocks Dumb Money’s Steve Cohen is betting on now. Steve Chohen’s strategy of increasing his stake in Boston Scientific Corporation (NYSE:BSX) by 96% during the second quarter appears to be working, as the healthcare equipment provider’s share price has soared in recent months, thanks to strong financial growth trends. Boston Scientific Corporation (NYSE:BSX) reported net sales of $3.5 billion in the second quarter, representing an 11% increase over the prior year period. Its GAAP net earnings per share of $0.18 rose from $0.17 per share a year ago.
Baron Funds, an investment management firm, expressed confidence in Boston Scientific Corporation (NYSE:BSX) in its second-quarter investor letter because of its ability to grow revenue in the high single digits and earnings per share in the double digits. Here is what the firm stated Boston Scientific Corporation (NYSE:BSX):
“We re-established a position in Boston Scientific Corporation (NYSE:BSX), a global developer, manufacturer, and marketer of medical devices that are used in a broad range of interventional medical specialties. We believe Boston Scientific can grow revenue reliably in the high single digits, driven by differentiated products in electrophysiology and structural heart. Coupled with cost discipline and over 50 basis points of annual operating margin expansion, we believe the company’s double-digit EPS growth profile makes Boston Scientific a compelling name within the large medical device universe.
Within electrophysiology, we think Boston Scientific is well positioned as a leader in the emerging field of pulsed field ablation (PFA). Traditionally, physicians have used temperature-based methods (either hot or cold) to disable heart tissue responsible for irregular heartbeats. Temperature-based methods may damage surrounding tissue, however. Examples include damaging the esophagus (food tube) and the phrenic nerve (which controls breathing). PFA, in comparison, relies on electricity to damage aberrant tissue, and because different types of tissue have different electrical thresholds, the surrounding tissue can be selectively spared. Boston Scientific is ahead of the pack with high-quality, randomized controlled trial data (Advent) to come out in the back half of 2023. Electrophysiology is an $8 billion market growing 12%, and we believe Boston Scientific can grow significantly above this market rate as it takes share with its PFA program.
Within structural heart, we like Boston Scientific’s position within left atrial appendage closure, which is a procedure that lowers stroke risk for atrial fibrillation patients. The company’s Watchman device continues to maintain dominant share (over 90%), and this is a $1 billion market growing over 25%. We are most excited about the potential for Watchman to expand into first-line therapy: currently patients would only get a Watchman if they cannot take anticoagulants because of bleeding risk; Boston Scientific is running the CHAMPION-AF trial to support Watchman as the first option. It has completed enrollment, and if the trial is successful, the company believes this has the potential to more than triple the addressable patients by 2027.”
13. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Value of Point72 Asset Management’s 13F Position: $188.9 million
Number of Hedge Fund Shareholders: 125
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the stocks in Point72’s portfolio that will benefit from the rising demand for artificial intelligence. With a stake worth $188.9 million, Dumb Money’s Steve Cohen is betting big on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), up 48% from the previous quarter. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures and sells integrated circuits and other semiconductor devices in Taiwan, China, and around the world. NVIDIA Corporation’s (NASDAQ:NVDA) processors such as H100 and A100, which are used to power ChatGPT and data centres, are made exclusively by Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM).
Hedge fund positions in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) increased as well, rising from 104 in the first quarter to 125 in the second.
12. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Value of Point72 Asset Management’s 13F Position: $192 million
Number of Hedge Fund Shareholders: 68
Additionally, Point72 increased its stake in healthcare equipment maker Intuitive Surgical, Inc. (NASDAQ:ISRG) by 119% during the second quarter. The firm appears to have benefited from its stake in Intuitive Surgical, Inc. (NASDAQ:ISRG), as the company’s shares have risen around 10% year to date. Because Intuitive Surgical, Inc. (NASDAQ:ISRG) has been experiencing robust financial growth trends, the share price upside prospects appear promising. Its second-quarter revenue of $1.76 billion increased 16% year on year, while net income jumped 18%. Furthermore, Intuitive Surgical, Inc. (NASDAQ:ISRG) raised its 2023 procedure growth rate forecast from 18%-21% to 20%-22%.
In the second quarter investor letter, Baron Funds, an investment management company, presented several reasons that are likely to help Intuitive Surgical, Inc. (NASDAQ:ISRG) to outperform. Here is what the firm stated about Intuitive Surgical, Inc. (NASDAQ:ISRG):
“Strength in health care equipment was largely due to the outperformance of sleep apnea device company Inspire Medical Systems, Inc. and robotic surgery system pioneer Intuitive Surgical, Inc. (NASDAQ:ISRG). Intuitive Surgical, Inc. manufactures and markets the da Vinci Surgical System, a robotic system used for minimally invasive procedures. Shares increased after Intuitive reported strong first-quarter financial results highlighted by a 26% increase in procedures and raised guidance for 2023. These results, which came in well above Street estimates, were driven by strength in general surgery procedures in the U.S. and non-urology procedures outside the U.S. We continue to believe Intuitive has a large opportunity to expand the use of robotic surgery over time.”
11. Lamb Weston Holdings, Inc. (NYSE:LW)
Value of Point72 Asset Management’s 13F Position: $199.8 million
Number of Hedge Fund Shareholders: 47
Dumb Money’s Steve Cohen, like Intuitive Surgical, Inc. (NASDAQ:ISRG), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Boston Scientific Corporation (NYSE:BSX), and Dominion Energy, Inc. (NYSE:D), is bullish on Lamb Weston Holdings, Inc. (NYSE:LW). In the second quarter, Point72 Asset Management increased its existing stake in Lamb Weston Holdings, Inc. (NYSE:LW) by 40% to nearly $200 million. Lamb Weston Holdings, Inc. (NYSE:LW) is a food and meat producer and distributor. Along with a steady share price upside potential, Lamb Weston Holdings, Inc. (NYSE:LW) also offers a dividend yield of around 1.50%.
As of the end of the second quarter, Lamb Weston Holdings, Inc. (NYSE:LW) was in 47 hedge fund portfolios. Stockbridge Partners and Citadel Investment Group were the leading stakeholders in Lamb Weston Holdings, Inc. (NYSE:LW).
10. Take-Two Interactive Software, Inc. (NASDAQ:TTWO)
Value of Point72 Asset Management’s 13F Position: $216 million
Number of Hedge Fund Shareholders: 58
Despite selling 20% of his stake in Take-Two Interactive Software, Inc. (NASDAQ:TTWO) in the second quarter to capitalize on the large share price gains, it remains in the list of the 15 stocks Dumb Money’s Steve Cohen is betting on right now. As of the end of the second quarter, Point72 held $216 million worth of stake in Take-Two Interactive Software, Inc. (NASDAQ:TTWO). Shares of Take-Two Interactive Software, Inc. (NASDAQ:TTWO) have risen 35% year to date, and fundamentals support the continuation of the uptrend. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) expects net bookings to be in the range of $5.45-$5.55 billion for the full year. Moreover, in an earnings call, its CEO/Chairman Strauss Zelnick stated that the company will enter its next phase of growth in fiscal 2025, with the potential to deliver over $8B in net bookings.
Hedge fund confidence in Take-Two Interactive Software, Inc. (NASDAQ:TTWO) has also increased. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) was in 58 hedge fund portfolios at the end of the second quarter, up from 54 in the previous quarter.
9. Dell Technologies Inc. (NYSE:DELL)
Value of Point72 Asset Management’s 13F Position: $235 million
Number of Hedge Fund Shareholders: 57
Steve Cohen’s strategy of increasing his stake in Dell Technologies Inc. (NYSE:DELL) appears to be working. The company’s stock has appreciated nearly 65% year to date. The share price upside of Dell Technologies Inc. (NYSE:DELL) is backed by increasing AI demand. In an earnings call, Jeff Clarke, Chief Operating Officer of Dell Technologies Inc. (NYSE:DELL), stated that AI is already showing its long-term tailwind, with continued demand growth across the portfolio. Analysts are also praising Dell Technologies Inc.’s (NYSE:DELL) robust growth prospects. Here is what Morgan Stanley’s analyst Erik Woodring said:
“And with our checks suggesting DELL is aiming to build 15-25k AI servers – or about $5B at the midpoint – in 2023 and 2024, despite very little volumes going to enterprises (more below), we believe the AI servers story is still in its early days, and can remain an upside driver of revenue and EPS for several quarters.”
Hedge fund confidence in the IT behemoth has also grown. Dell Technologies Inc. (NYSE:DELL) was in 57 hedge fund portfolios as of the end of the second quarter compared to 41 in the previous quarter.
8. Zimmer Biomet Holdings, Inc. (NYSE:ZBH)
Value of Point72 Asset Management’s 13F Position: $238 million
Number of Hedge Fund Shareholders: 48
Zimmer Biomet Holdings, Inc. (NYSE:ZBH) is a provider of orthopaedic reconstructive products in the healthcare industry. Following a steady increase in share price in the first half, Zimmer Biomet Holdings, Inc. (NYSE:ZBH) shares have dropped in the last three months due to concerns that newer weight loss drugs known as GLP-1 receptor agonists may harm the company’s knee implant business. However, Zimmer Biomet Holdings, Inc. (NYSE:ZBH) expects full-year revenue growth of 6.5%-7.0%, up from the previous forecast of 5.0%-6.0% YoY growth. Zimmer Biomet Holdings, Inc. (NYSE:ZBH) also pays a $0.24 per share quarterly dividend.
As of the end of the second quarter, there were 48 hedge fund positions in Zimmer Biomet Holdings, Inc. (NYSE:ZBH). Point72 Asset Management became a leading shareholder in Zimmer Biomet Holdings, Inc. (NYSE:ZBH) after increasing its stake by 120% during the second quarter.
7. Meta Platforms, Inc. (NASDAQ:META)
Value of Point72 Asset Management’s 13F Position: $240 million
Number of Hedge Fund Shareholders: 231
While Cohen’s firm sold 67% of its stake in Meta Platforms, Inc. (NASDAQ:META) during the second quarter to capitalize on massive share price gains, the firm still owned a $240 million stake in the company. Meta Platforms, Inc. (NASDAQ:META) stock has soared 144% year to date, owing to increased ad revenue. Meta Platforms, Inc. (NASDAQ:META) reported an 11% year-over-year increase in revenue to $32 billion for the June quarter. The company’s operating income increased by 12% year on year to $9.39 billion. Furthermore, Meta Platforms, Inc. (NASDAQ:META) anticipates third-quarter revenue of $32 billion to $34.5 billion, up from the previous forecast of $31.11 billion.
In the second quarter investor letter, Artisan Partners, an investment management company, made comments about Meta Platforms, Inc. (NASDAQ:META). Here is what the firm stated about Meta Platforms, Inc. (NASDAQ:META:
“Our best performing stocks this quarter were Meta Platforms, Inc. (NASDAQ:META), Alphabet and Heidelberg Materials. Meta was the largest contributor to performance. Its shares have almost fully recovered from last year’s declines, rising 35% during the quarter and 138% YTD. During the quarter, the company reported earnings that showed a return to growth and healthy user engagement metrics. Most importantly, profitability appears to have stabilized and is poised to improve as significant cost reduction actions implemented over the past six months begin to have an impact. Separate from fundamental performance, there is excitement over AI’s potential to help the company’s business. While Meta’s technology prowess and massively scaled media platform certainly position the company to take advantage of AI, we believe it’s far too early to estimate any discrete tangible benefits. Overall, we view AI as one of several drivers that will contribute to Meta’s continued growth.”
6. AutoZone, Inc. (NYSE:AZO)
Value of Point72 Asset Management’s 13F Position: $269 million
Number of Hedge Fund Shareholders: 52
During the second quarter, Dumb Money’s Steve Cohen increased his stake in AutoZone, Inc. (NYSE:AZO) by 70%. AutoZone, Inc. (NYSE:AZO) is a global retailer and distributor of automotive replacement parts and accessories. Its share price remained volatile throughout 2023, but recent financial performance and the future outlook provide support to the stock price. During the June quarter, AutoZone, Inc. (NYSE:AZO) generated year-over-year revenue growth of 6.4% to $5.7 billion, while operating profit increased 10.8% to $1.2 billion.
Hedge fund confidence in AutoZone, Inc. (NYSE:AZO) has also increased. AutoZone, Inc. (NYSE:AZO) was in 52 hedge fund portfolios at the end of the second quarter, up from 52 the previous quarter.
Like Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Take-Two Interactive Software, Inc. (NASDAQ:TTWO), Meta Platforms, Inc. (NASDAQ:META), Dominion Energy, Inc. (NYSE:D), Boston Scientific Corporation (NYSE:BSX), Intuitive Surgical, Inc. (NASDAQ:ISRG), Zimmer Biomet Holdings, Inc. (NYSE:ZBH), Dell Technologies Inc. (NYSE:DELL), and Lamb Weston Holdings, Inc. (NYSE:LW), AutoZone, Inc. (NYSE:AZO) is among the 15 Stocks Dumb Money’s Steve Cohen is betting on now.
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Disclosure: None. 15 Stocks Dumb Money’s Steve Cohen Is Betting On Now is originally published on Insider Monkey.
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