Third Point’s Notable Moves in Q3
Since its inception in 1995, Daniel Loeb and Third Point Management have managed to achieve impressive results. Whenever they make moves in the market, it’s worth taking note, especially with the two stocks they’ve recently acquired in the third quarter—the outlook for these investments appears quite promising.
Recently, we’ve noticed that Third Point has been more stringent in its regulatory practices, particularly in light of the Securities and Exchange Commission (SEC) reporting requirements. In the third quarter, they added shares of Microsoft (NASDAQ: MSFT) and Meta Platforms (NASDAQ: META). These stock movements are significant, and it seems that both present strong upside potential for the hedge fund.
In fact, from the second to third quarter, Third Point purchased an additional 700,000 shares of Microsoft. This move nearly tripled their holdings in the company, suggesting a strong vote of confidence. Microsoft’s involvement in artificial intelligence should not come as a surprise to anyone following the industry.
It’s also worth considering that Third Point might be looking at Microsoft as a solid investment in part because of its ties to OpenAI. Since OpenAI isn’t publicly traded, owning Microsoft provides a way for investors to tap into that market. Reports indicate that Microsoft holds about 27% of OpenAI, and there’s talk that OpenAI might go public in 2026. If that happens, Microsoft’s stock could see a significant boost.
Beyond this potential, Microsoft’s core business is performing exceptionally well. Their Office products have experienced notable growth due to the introduction of Copilot, and Azure, their cloud service, has become a leading choice for developing AI models.
Wall Street analysts are optimistic about Microsoft’s future, anticipating solid profits with revenue growth rates around 16% and 15% for fiscal years 2026 and 2027, respectively. That kind of growth is appealing, and it’s easy to see why Loeb and Third Point are keen on Microsoft.
Microsoft certainly has a robust position in the AI sector, and personally, I think it makes sense for investors to keep an eye on Loeb’s trades.
Asset managers like Third Point are required to disclose their quarter-end holdings within 45 days of a quarter’s close, so the most recent information dates back to September 30. This is just a snapshot of their activities as of the end of Q3.
On a less positive note for Meta shareholders, the stock has seen a decline of about 10% since then. This drop followed a lackluster earnings report that raised concerns regarding Meta’s planned spending on data center capital in 2026.
Despite this, I wouldn’t be shocked if Third Point expanded its stake in Meta during Q4. The reason I suspect they might have is that Meta’s core business remained strong throughout that period. Yes, the stock price may have dropped following disappointing earnings, but revenue grew an impressive 26% year-over-year. That speaks volumes about the vitality of their advertising business, and I doubt that trend will slow down anytime soon.
After the recent dip, Meta is trading at an appealing valuation of 22 times its projected earnings for 2026. To put this into perspective, the S&P 500 is trading at around 22.3 times its expected earnings. This means Meta is currently available at a discount compared to the broader market—now could be a good time for potential investors.
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