Three hedge funds added Taiwan Semiconductor shares in Q2 while two sold Broadcom. TSM up 41% YTD, AVGO down 8% in a week despite 48% revenue growth.
The second quarter's 13F filings show a clear divergence inside the semiconductor trade. Three major hedge funds bought Taiwan Semiconductor Manufacturing shares. Two of them sold their entire Broadcom positions.
David Tepper's Appaloosa raised its TSM stake by 322,500 shares, reaching 1.65 million shares valued at $788 million. Dan Loeb's Third Point added 185,000 shares for a 460,000-share position worth $219.7 million. Stanley Druckenmiller's Duquesne Family Office bought 94,400 shares, ending with 589,680 shares valued at $281.6 million.
On Broadcom, Third Point sold all 50,000 shares. Duquesne exited all 195,955 shares. Tepper took the opposite direction, opening a 150,000-share position worth $56.7 million. Appaloosa was the only manager in the group that added both names.
The Broadcom sells came even as the company posted strong operating numbers. Revenue hit $22.2 billion in the fiscal second quarter, up 48% from a year earlier. AI semiconductor revenue reached $10.8 billion, a 143% gain. CEO Hock Tan told analysts demand for XPUs and networking is "simply insatiable." He forecast FY2027 AI revenue would "exceed very easily $100 billion." The company guided third-quarter revenue to $29.4 billion and AI silicon to $16 billion.
So why sell? Customer concentration risk, traders said. Broadcom's TPU partnership with Alphabet accounts for a large share of its AI revenue. Research firm SemiAnalysis published a note suggesting Alphabet is broadening its supplier base to include AMD and MediaTek. Broadcom shares fell nearly 6% on Friday after the note circulated.
The risk may not be as stark as the market reaction suggests, analysts said. Alphabet's spending plans are growing across all three suppliers. The expanded pie means Broadcom still gets a large portion. A renewed five-year partnership with Alphabet provides revenue visibility. The SemiAnalysis estimate of lower TPU allocation for Broadcom could reflect capacity constraints as the company ramps multiple customer projects, a trader said.
Taiwan Semiconductor offers exposure to the same AI buildout without the single-customer dependency. The company delivered second-quarter revenue of $40.2 billion, at the high end of its guidance. High-performance computing accounted for 66% of platform revenue. Full-year 2026 growth is expected to be "slightly above 40% year over year in USD terms." CEO Cici Wei said demand is "very strong" from now through 2029 to 2030. The company raised its 2026 capital expenditure plan to $60-64 billion.
Price action has followed the positioning. Taiwan Semi trades at $426.35, up 41% year to date and 78.8% over one year. Broadcom sits at $392.99, down 8.13% in the past week and up 13.97% for the year.
Druckenmiller's semiconductor rotation went beyond those two names. He sold Intel and Micron. He also exited 323,135 Lattice Semiconductor shares. He opened new positions in Lam Research, AMD, Entegris, and Rambus. He added 490,000 shares of STMicroelectronics.
Third Point's exits were broader. Loeb sold Lam Research, KLA, the VanEck SMH semiconductor ETF, and his entire NVIDIA stake. He bought 18,000 shares of ASML.
The 13F filings capture positions as of June 30. Current holdings may differ. Broadcom reports fiscal third-quarter results in August. TSMC gives its next update in October.
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