MW Dan Loeb bet on these international AI stocks, adding to winning Nvidia and TSMC plays

By Emily Bary

Third Point looked overseas to find a cheaper way to play the memory-chip boom

Third Point cheered SK Hynix's market-leading status.

Daniel Loeb's Third Point LLC made a bet on SK Hynix in the third quarter as it saw a way to play the artificial-intelligence trade in a cheaper way than U.S. options afforded.

His third-quarter investor letter mentioned new investments in SK Hynix (KR:000660), a South Korean memory player, and Ebara (JP:6361), a Japanese maker of semiconductor-production equipment. "We believe both companies are leaders in their respective industries, significant beneficiaries of the AI buildout, and trade at undemanding absolute valuations and meaningful discounts to their U.S. peers," he wrote.

See also: 10 stocks that let you invest like Nvidia in the next hot AI trade

Loeb continues to see opportunities for SK Hynix, which has seen its stock surge more than 250% so far this year. The company competes against Micron Technology $(MU)$ and Samsung Electronics (KR:005930) in the oligopolistic memory market that's "in the early innings of de-commoditization."

"AI workloads have been driving substantial growth in high bandwidth memory...where Hynix is the market leader with over 50% market share," he wrote. And high-bandwidth memory confers various benefits, such as "design stickiness," that Loeb thinks can reduce earnings volatility in the traditionally cyclical memory industry.

See also: The surprising stocks leading the tech sector this year thanks to an AI renaissance

He noted that SK Hynix is trading "at a mere 7x" estimated 2026 earnings, whereas Micron commands a 10x multiple and Samsung has a 12x multiple. Loeb also invested in SK Square (KR:402340), a "related holding company," which has a 20% stake in SK Hynix and thereby lets investors "buy SK Hynix at a nearly 60% discount."

Loeb also discussed the investment in Ebara, which makes chip-production equipment. The company is "a major beneficiary of the advanced packaging structures critical in AI semiconductors across both logic and memory," he wrote, but he noted that shares trade at a "substantial discount" to rivals.

That discount reflects "an overextended cost structure as well as unnecessarily discounted pricing," which Loeb said has hurt margins, but Third Point is "in active dialogue with Ebara's new management team."

U.S. artificial-intelligence investments served Third Point well in the third quarter, according to the letter, as Taiwan Semiconductor Manufacturing $(TSM)$ (TW:2330) and Nvidia (NVDA) were its two biggest winners.

Loeb commented that OpenAI is expanding its computing capacity at a scale "difficult to comprehend" - but one nonetheless emphasizing "a compute-constrained world...that has benefited our existing investments in TSMC and Nvidia as two integral pieces in this buildout."

Third Point's flagship Offshore Fund returned 3.2% in the third quarter, trailing the S&P 500's SPX 8.1% return and the MSCI World Index's XX:990100 7.4% return.

"Our performance for the quarter and year has been below our expectations due to the weak performance of several of our largest event-driven positions including Kenvue," the letter noted.

That stock stands to be less of a detractor in the fourth quarter, as Kimberly-Clark $(KMB)$ announced Monday plans to purchase Kenvue $(KVUE)$ at a 46% premium to the stock's Friday close.

See: Could Huggies and Tylenol be a good fit? Kimberly-Clark is buying Kenvue for $48 billion

-Emily Bary

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November 03, 2025 18:29 ET (23:29 GMT)

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