Susquehanna Investment Group has reduced its stake in Nvidia and increased its position in Micron by 271%.
Jeff Yass is co-founder of institutional money manager Susquehanna International Group (SIG). SIG specializes in quantitative trading and has positions in many leading technology stocks.
As I analyzed SIG’s most recent 13F filing, I noticed something interesting. During the second quarter, the fund sold 52 million shares Nvidia (NVDA 0.52%) — reducing its position in the chip giant by about 73%.
At the same time, SIG increased its stake in Micron technology (MU 1.68%) by 271% – purchase of 3.5 million shares.
Below, I’m going to break down why I think it makes sense to trade Nvidia for Micron right now, and more importantly, why Micron could be the most lucrative option in the long run.
Why Sell Nvidia Stock Now?
Nvidia is the poster child of the chip industry, driven by record growth in its graphics processing units (GPUs). Indeed, GPUs are a crucial part of the infrastructure in generative AI development and Nvidia is widely considered to have the best products on the market.
Still, I wouldn’t rest on my laurels if I were in Nvidia’s position. Many of the company’s own customers, including Microsoft, Alphabet, Tesla, MetaplatformsAnd Amazonare all investing heavily in their own chip infrastructure. The introduction of more GPUs to the market makes predicting Nvidia’s growth prospects quite challenging.
While I can’t say how much Nvidia will be affected by the competition, I do think it’s fair to say that the rate at which Nvidia’s revenue and profits grow will slow. I think it’s this conundrum that has inspired some of Wall Street’s brightest minds, including Citadel’s Ken Griffin and DE Shaw’s David Shaw, to also reduce their positions in Nvidia in recent periods.
While Nvidia should remain a leader in AI for years to come, I’m wary of the stock’s long-term potential after surging 227% over the past year.
Image source: Getty Images.
Why invest in Micron now?
I immediately admit that the financial profile for Micron is difficult to digest. The company’s revenue trends have noticeable peaks and valleys; Meanwhile, Micron’s profitability profile has clearly not yet reached a maturity point.
MU revenue (quarterly) data according to YCharts
Despite these financial inconsistencies, I see Micron as a particularly good bet on the long-term story around AI.
Micron specializes in memory and storage solutions – a pretty important feature when it comes to training large language models (LLMs) and developing generative AI applications. Demand for memory solutions should see a significant increase as major cloud providers such as Amazon, Microsoft, Oracleand Alphabet continue to invest heavily in data center infrastructure and their own chips.
Given that many of these IT architecture projects will take years to build out and come to fruition, Micron appears well positioned to benefit over the coming years.
The future looks bright
Ultimately, I still think it’s a smart move to maintain some familiarity with Nvidia. The company’s upcoming launch of the Blackwell series GPUs should serve as a meaningful catalyst at least next year.
However, it’s difficult to know what Nvidia’s growth will look like as the competitive landscape begins to become clearer.
In contrast, Micron hasn’t really seen the full potential of AI tailwinds yet. In the long term, Micron could become a multibagger opportunity as sales start to rise at a steady pace and profits start to increase.
I think Susquehanna’s decision to reduce his position in Nvidia and take profits while buying Micron stock is a very smart decision that will pay off in the long run.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia and Tesla. The Motley Fool holds positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, Oracle and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
