How a Billionaire Investor Is Pivoting Into the Companies That Own Everything—and Away From Nvidia

When billionaire hedge fund manager Israel Englander’s Millennium Management files its quarterly 13F forms with the Securities and Exchange Commission, Wall Street takes notice. These filings read like an itemized receipt of what the world’s most sophisticated investors believe will shape the market ahead. In Q3 2024, Englander’s moves revealed something striking: he’s systematically trimming his massive Nvidia stake while aggressively accumulating positions in what might be called the companies that own everything—dominant players with deep ecosystem control across multiple markets. This pivot signals a fundamental shift in how elite capital is positioning for the next phase of artificial intelligence’s evolution.

The Strategic Retreat From AI Hardware Darling Nvidia

Millennium Management has now been a net seller of Nvidia stock for four consecutive quarters, with a 12.6% reduction in Q3 2024 alone. While the magnitude seems modest on its surface, the consistency of the move speaks volumes. Englander’s team appears to be answering a critical question: if everyone already owns Nvidia, where does the next wave of AI-driven returns come from?

The answer, his recent trades suggest, lies not in the infrastructure layer but in companies with ecosystem control—platforms that can monetize AI across their entire user base while leveraging existing competitive advantages.

Microsoft: The AI Ecosystem Integrator

During Q3 2024, Millennium Management accumulated 1.6 million shares of Microsoft, boosting its position by 51.4%. This isn’t random—it reflects a deeper strategic thesis about how companies that own everything leverage their scale.

Microsoft’s entry into the generative AI race has been nothing short of transformative. After OpenAI released ChatGPT in November 2022, Microsoft immediately invested $10 billion into the partnership, recognizing an opportunity to embed AI capabilities across its entire ecosystem. The result has been the rollout of Copilot, a suite of AI-powered virtual assistants that now permeate Microsoft’s product line.

The adoption curve tells the story: according to CEO Satya Nadella, “Nearly 70% of the Fortune 500 now use Microsoft 365 Copilot, and customers continue to adopt it at a faster rate than any other new Microsoft 365 suite.” This isn’t incremental adoption—it’s industry-wide integration at remarkable speed. The company’s first-mover advantage has allowed Microsoft to not only develop AI solutions faster than competitors, but more importantly, to embed them directly into the workflows of the world’s largest enterprises.

The financial impact is already visible. Microsoft’s Azure cloud division saw growth that included “roughly 12 points from AI services” in recent quarters. As AI spending scales, this metric will become the critical measure of whether Microsoft can maintain its cloud dominance against Amazon Web Services and Alphabet’s Google Cloud.

Valuation considerations likely reinforced Englander’s decision. Microsoft trades at a price-to-earnings multiple of 34.4, above the S&P 500 average of 27.9. However, this multiple essentially matches Microsoft’s 10-year average, suggesting the market isn’t overpricing the stock relative to its own historical range. More importantly, Microsoft today is fundamentally different from Microsoft a decade ago—larger, more integrated, and positioned at the center of enterprise AI adoption.

Meta Platforms: Turning the Advertising Moat Into an AI Advantage

Englander’s other significant acquisition in Q3 2024 was Meta Platforms, where Millennium increased its stake after a period of trimming. The fund’s Meta activity over the past four quarters shows deliberate in-and-out positioning, likely reflecting caution about the company’s AI transition. That caution may now be lifting.

Meta’s challenge has always been straightforward: its Facebook and Instagram platforms face relentless competition from Google, YouTube, TikTok, Pinterest, and Snap. Yet the company’s development of Llama, an open-source large language model, has quietly positioned Meta as a serious AI competitor to offerings from Amazon, Google, and OpenAI.

The real inflection point came when Meta demonstrated that AI integration directly drives engagement. During Q3 2024 earnings, management disclosed that AI-powered features have already begun increasing time spent on Facebook and Instagram. This is the critical connection—if Meta can convert higher engagement into additional advertising revenue, the company unlocks a powerful flywheel: more revenue enables more AI investment, which drives better products, which attract more users and more advertisers.

Meta represents a different kind of ecosystem player than Microsoft, but the principle is identical: these are companies that own everything in their domain. For Meta, that domain is social engagement and digital advertising. For Microsoft, it’s enterprise software and cloud infrastructure. Both have now embedded AI at their core.

Why Englander’s Thesis Matters

The pattern emerging from Englander’s trades reflects a sophisticated understanding of AI’s second act. The first act—the race to build AI models and infrastructure—has largely played out. The real value creation will come from platforms that can integrate AI into the services where billions of people already spend time and money.

Companies that own everything—those with ecosystem control—possess an asymmetric advantage: they can deploy AI at scale across their entire user base without building a new audience from scratch. Microsoft doesn’t need to convince enterprises to sign up for AI; they’re already customers of Office 365 and Azure. Meta doesn’t need new users; it needs to make existing users more engaged and valuable to advertisers.

Englander’s decision to rotate away from Nvidia and into these ecosystem players suggests he believes the next major outperformance will come not from companies selling tools, but from companies that own the end-user relationships—and increasingly, they all own everything.