There aren't too many investors better versed in technology than Phillipe Laffont. With a $6.5 billion net worth, according to Forbes, Laffont cut his teeth at the well-known hedge fund Tiger Management, the predecessor of Tiger Global Management, which focuses heavily on tech investing.
In 1999, Laffont founded Coatue Management, a hedge fund and venture capital business that has invested in many successful tech start-ups including TikTok, Snap, and Spotify. The company's public equities portfolio was valued at roughly $26.9 billion at the end of the third quarter and held 81 stocks.
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Not long ago, Coatue completely sold its stake in ASML Holding (NASDAQ: ASML) and piled into a new growth stock that's risen 6,250% since its initial public offering in 2006.
A struggling AI stock
In the third quarter, Coatue sold its remaining 113,431 shares of ASML, completely exiting the position. ASML produces lithography machines for the artificial intelligence (AI) industry, which are key in making the microchips that power much of the industry. Lithography machines are used to carve patterns into silicon wafers. Unlike most companies in the AI space, ASML has struggled more recently and saw its stock decline roughly 8.5% in 2024, compared to the broader benchmark S&P 500 index's 23% gain.
Headquartered in the Netherlands, ASML struggled in 2024 due to restrictions on exports to China imposed by countries like the U.S. and the Netherlands. On its most recentearnings call management lowered its range for revenue in 2025, suggesting that revenue from its Chinese client base would come in at 20% in 2025, lower than figures cited on past earnings calls.
ASML remains a key player in the AI space, a market that investors seemingly assign a higher value to every day, so there's still potential. However, it may not be on Coatue's timeline. U.S.-China relations are not expected to get any easier under President Trump's administration than they were under former President Biden's, and the extent of potential tariffs on China is still unknown.
Buying a High-margin, high-growth Mexican restaurant business
Meanwhile, Coatue initiated several new positions in the third quarter, including the purchase of over 4.5 million shares in the quick-service restaurant Chipotle Mexican Grill (NYSE: CMG). Chipotle is a growth stock that has been wildly successful since going public at the beginning of 2006.
The restaurant chain is known for serving fresh food in an efficient time manner and at a reasonable price. The company has also served investors some nice margins. In the third quarter of the year, Chipotle delivered a restaurant-level operating margin of 25.5%, down from 26.3% from a year ago. The stock zoomed nearly 32% higher in 2024, beating the broader market, despite complaints from customers about portion sizes and higher costs on items like avocados.
Chipotle looks to have plenty of runway in its growth story. Management continues to roll out new equipment in its restaurants, such as the dual-sided plancha grill that can cook meat more efficiently and therefore get customers through their lines quicker.
The company is also scaling its real estate footprint rapidly. In 2024, management said it expects to have added a record 285 to 315 new stores. In 2025, Chipotle expects to top that and add an additional 315 to 345 stores. Management ultimately wants to double its North American restaurants total to 7,000 by 2030. The company also wants to build more stores internationally.
The stock is not cheap at 45 times forward earnings, but Laffont likely sees this as a fair trade-off for a company innovating its technology and planning massive growth.
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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Chipotle Mexican Grill, and Spotify Technology. The Motley Fool recommends the following options: short March 2025 $58 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
