Hedge Funds Dumped Broadcom for Taiwan Semiconductor Last Quarter, 13F Filings Show

Second-quarter 13F filings, disclosed late last week and covering positions as of June 30, show some of Wall Street's most-watched hedge funds making a clean rotation: out of Broadcom, into Taiwan Semiconductor Manufacturing.

Dan Loeb's Third Point sold its entire Broadcom stake, all 50,000 shares, according to Yahoo Finance. Stanley Druckenmiller's Duquesne Family Office did the same, dumping all 195,955 shares. Both funds turned around and bought more Taiwan Semi. Loeb's Third Point added 185,000 shares to reach 460,000, worth roughly $219.7 million. Druckenmiller's Duquesne added 94,400 shares to reach 589,680, worth about $281.6 million.

David Tepper's Appaloosa went further on Taiwan Semi, adding 322,500 shares to reach 1.65 million shares worth nearly $788 million, per the same filings reported by 247wallst.com. But Tepper broke from the pack on Broadcom. Appaloosa opened a brand-new Broadcom position of 150,000 shares valued at $56.7 million in the same quarter, making him the only major manager tracked here who bought both names.

The "smart money" isn't unanimous. Two funds ran from Broadcom. One doubled down on it while also buying Taiwan Semi. Whatever the crowd trade is, it isn't total consensus.

Druckenmiller's broader portfolio moves offer insight into strategy. Duquesne exited Intel (411,400 shares), Micron (23,400 shares) and Lattice Semiconductor (323,135 shares), while adding STMicroelectronics (490,000 new shares) and opening fresh positions in Lam Research, AMD, Entegris and Rambus. That's a bet on chip equipment and process technology over legacy chipmakers, not a blanket AI bull call.

Loeb's Third Point moved in a similar direction across the board, exiting Lam Research, KLA, the VanEck semiconductor ETF, and its entire Nvidia position, while adding ASML.

Why Broadcom fell out of favor

SemiAnalysis published a report late last week suggesting Google's parent Alphabet is diversifying its custom AI chip supply toward MediaTek and AMD, away from sole reliance on Broadcom. Broadcom shares fell nearly 6% on that Friday session alone, according to 247wallst.com, and were down 8.13% for the week to $392.99, even as Taiwan Semi gained 41% year-to-date and 78.82% over the past year to $426.35.

MarketBeat separately flagged that Broadcom investors are also weighing VMware security vulnerabilities and concerns about debt financing tied to the AI infrastructure buildout, on top of an already elevated valuation.

247wallst.com's own reporting pushed back on the panic, and that pushback deserves airing. Google's AI spending plans remain massive regardless of supplier mix, meaning Broadcom keeps a large slice of a growing pie. Broadcom also recently signed a renewed five-year partnership with Google. And SemiAnalysis trimming its allocation estimate for Broadcom could simply reflect Broadcom juggling more customers, not losing Google's business outright. None of that is proof the sell-off was overdone, but it is a real counterpoint the stock-price move alone doesn't capture.

The bigger backdrop: a market getting nervous about its own AI bet

This rotation isn't happening in isolation. Capital expenditures on AI infrastructure jumped from $235 billion in 2024 to a projected $700 billion-plus in 2026, according to The Epoch Times, citing Goldman Sachs and JPMorgan estimates that put total AI capex as high as $4 trillion to $8 trillion over five years. AI-related companies drove roughly three-quarters of the S&P 500's gains over the past year and about 80% of its earnings growth, per JPMorgan Asset Management data cited by The Epoch Times.

Peter Earle, senior economist at the American Institute for Economic Research, told The Epoch Times that history is full of episodes where transformational technology attracted more capital than it could profitably absorb in the short run, and that investors often underestimate how long real productivity gains take to show up. That's a real, non-partisan concern, not fringe skepticism. It doesn't mean the AI buildout is fake. It means the payoff timeline is genuinely uncertain, and betting the market's valuation on a fast payoff carries real risk.

That uncertainty showed up violently in Asia. The BBC reported that South Korea's Kospi index was halted by a circuit breaker after falling 8% in a single session, before closing down 10.8%, with Samsung Electronics and SK Hynix both dropping more than 13%. The rout followed a Wall Street Journal report that Nvidia was in talks to put roughly $250 billion into a data-center project with OpenAI, which spooked markets already jittery about AI spending returns. Nvidia's slide briefly cost it the title of world's most valuable public company to Apple, according to the BBC.

CNN's reporting adds the retail-investor angle largely missing from the fund-flow story. Thousands of first-time investors across Taiwan, South Korea and Japan have piled into chip stocks this year, some borrowing heavily to do it. Chung San-Lin, a finance professor at National Taiwan University, told CNN that record margin debt in Taiwan raises the risk that any downturn triggers forced selling and compounds losses.

The open question isn't whether AI infrastructure spending is real. It clearly is. It's whether the current valuations, and the leverage propping up parts of this trade in Asia, can survive a slower-than-expected payoff. The 13F filings show that even the funds getting paid to answer that question don't fully agree.