Ken Griffin is the founder, CEO and majority owner of Citadel, one of the premier hedge funds. Griffin founded the company in 1990 and grew it into what it is today through a combination of quantitative trading and macro strategies.
Ken Griffin and Citadel are noted for an aggressive style focusing on technology and heavy data dependence. Citadel currently employs more than 18,000 people, and Ken Griffin has a net worth of over $35 billion. It’s no wonder investors seek to mimic his trades. The good news is most of what Citadel and Griffin do is very much in line with broader recommendations.
Nvidia (NVDA)
Ken Griffin and Citadel, like many hedge funds, are heavily invested in Nvidia (NASDAQ:NVDA).
Citadel’s investment in Nvidia constitutes over 1% of its portfolio and is worth just over $1 billion. Citadel currently controls 2.05 million shares of NVDA stock. Griffin’s firm increased its holding by 738,000 shares during the third quarter, making it amongst the company’s biggest moves.
Given Citadel’s interest in technology, it’s no surprise the company is heavily investing in Nvidia again. However, this is a strong sign for NVDA shares, which plateaued in the third quarter. The fact that Citadel invested so heavily in Nvidia signals that Griffin believes share prices have further to rise.
Nvidia’s H100 chips are the standard bearer concerning artificial intelligence (AI) and have seen incredible demand throughout 2023, resulting in record growth. The company will release its updated H200 chip in 2024, which should serve as a catalyst to propel it even higher.
Microsoft (MSFT)
Griffin and Citadel are also big proponents of investing in Microsoft (NASDAQ:MSFT). Microsoft is one of the leading technology firms globally and has managed to position itself to benefit from megatrends over and over. Thus, it’s easy to see why Griffin and Citadel remain so committed to Microsoft, given the firm’s history of following megatrends.
MSFT represents the largest holding within Citadel’s portfolio, constituting 1.91% of its overall holding. Shares currently trade for around $375. Citadel increased its position in Microsoft during the second and third quarters of this year by a grand total of 3.67 million shares.
Citadel scooped up more than 1.6 million shares during the third quarter at an average closing price of $330. That should bolster investor confidence in Microsoft, even as share prices rise to record highs. As mentioned, the company is incredibly well-positioned with AI and the cloud, in particular. Microsoft is the most obvious choice for investors seeking to replicate the success of Ken Griffin and Citadel.
Eli Lilly (LLY)
Eli Lilly (NYSE:LLY) is another stock to consider for investors seeking to trade like Ken Griffin. LLY shares don’t constitute a particularly large holding for Citadel, constituting just 0.45% of its total portfolio. However, the company recently increased its position during Q3, scooping up 214,000 shares at an average closing price of $515.
The big news, of course, is Eli Lilly received FDA approval to market the diabetes drug Mounjaro as a weight loss drug under the trade name Zepbound. Eli Lilly is competing directly with Novo Nordisk (NYSE:NVO) in the battle for weight loss drug supremacy.
That isn’t to say the stock hasn’t been without controversy. There are questions about who will pay for the drug, with many employee-sponsored benefits plans poorly positioned to absorb the high prices for the treatment. Beyond that, recent data showed that patients who stop taking Zepbound regain the weight they lost. I’m not sure that’s a reason to discount LLY stock at all. Instead, it suggests to me that Eli Lilly can reasonably anticipate long-term demand for its drug — a good thing from an investor’s standpoint.
On the date of publication, Alex Sirois did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
