Third Point founder Dan Loeb has reiterated his bullish stance on major technology companies, saying artificial intelligence continues to make the sector one of the most compelling areas for capital allocation, according to a report by MarketWatch.
Speaking on the “Invest Like the Best” podcast, Loeb said the risk-reward profile for large-cap technology remains attractive, particularly given the combination of strong earnings momentum and accelerating AI adoption.
He said that while he had considered trimming positions such as Nvidia, valuations remain justified when viewed against persistent growth expectations.
“Unless you take a very negative, almost draconian view that AI growth rolls over later this decade, tech is the most attractive sector right now,” Loeb said, adding that the majority of Third Point’s capital remains invested in the space.
Loeb’s comments echo themes outlined in his recent investor letter, in which the firm highlighted gains across semiconductors, memory, semiconductor equipment, and AI-linked infrastructure sectors, alongside holdings in aerospace and defence. These positions helped the fund outperform the broader market in the first quarter, despite a modest negative return over the period.
The hedge fund manager also reflected on past investment mistakes, pointing to Third Point’s exposure to FTX as a key lesson in due diligence. The now-collapsed crypto exchange, which failed in 2022 following revelations around misuse of customer funds, appeared robust at the time due to rapid growth and high-profile venture backing.
Loeb said the episode has sharpened the firm’s internal verification processes, including greater scrutiny of basic financial metrics such as cash balances, even in cases where business momentum appears strong.
He noted, however, that venture capital ecosystems can still produce high-quality companies and that most founders operate in good faith, despite occasional governance failures.
Alongside this, Loeb highlighted successful credit investments linked to Elon Musk’s acquisition of Twitter. He said Third Point participated in trading opportunities in the company’s acquisition financing debt, which was initially viewed cautiously by the wider credit market but later recovered in value as the company’s outlook stabilised.
He also referenced investments tied to xAI, noting that despite limited cash flow visibility at the time of issuance, the firm was comfortable underwriting the credit based on its assessment of underlying business quality and Musk’s broader technology ecosystem.
Loeb added that experience across both public and private markets continues to inform Third Point’s approach, particularly when assessing complex or rapidly evolving technology-driven businesses.
