A Billionaire's Pivot: Why Philippe Laffont Is Dumping Tesla But Doubling Down on This Overlooked AI Play

The 13F Filing Tells Two Stories

When Form 13F filings hit on Nov. 14, institutional investors revealed their Q3 moves. Philippe Laffont’s Coatue Management — managing ~$41B AUM — just made a bold statement: Tesla is yesterday’s news, but one massively undervalued AI company isn’t.

Why Is Laffont Bailing on Tesla?

Coatue has been holding Tesla since early 2020, but things have shifted. Laffont just trimmed 15% of the position (307K shares), following a larger 64% reduction since March 2023. Yeah, it’s partly profit-taking — shares are up ~10x since he bought in. But dig deeper and the story gets messier:

The margin problem: Tesla’s been slashing EV prices over 30+ times in 2.5 years. Competitive pressure is real. Vehicle margins are getting crushed.

The income problem: About 40% of Tesla’s Q3 pre-tax income came from regulatory credits and interest income — non-core, non-scalable stuff. Sometimes it’s hit 50%+.

The credibility gap: Elon’s been saying Level 5 autonomous driving is “one year away” for over a decade. One million robotaxis by 2020? Never happened. Strip those unfulfilled promises from the valuation, and the stock might look very different.

Translation: Laffont sees the growth story getting thinner.

Meet the Real Winner: Alibaba’s AI Renaissance

While dumping Tesla, Laffont went the opposite direction on Alibaba — a staggering 130% position increase (1.13M new shares). Yes, China stocks carry regulatory risk. Yes, they trade cheap for a reason. But here’s what Laffont apparently sees:

The e-commerce anchor: Alibaba’s Taobao + Tmall own 44% of China’s online retail market. That’s a moat. Unlike the brutally competitive, low-margin U.S. e-commerce space, China’s middle class is still growing, and e-commerce penetration has runway.

The real growth engine: Alibaba Cloud’s AI play. They’re embedding generative AI and LLMs into their infrastructure service. Result? Cloud Intelligence revenue hit $4.66B in Q2 (26% YoY growth), with AI-related products posting triple-digit growth for 8 consecutive quarters.

The valuation steal: Trading at 16x forward earnings — way below the “Magnificent Seven” AI gang. And that’s before factoring in Alibaba’s massive net cash position.

The Bigger Picture

Laffont’s move signals something worth noting: mature tech stories (even disruptive ones like Tesla) are getting repriced lower, while undervalued AI infrastructure plays in emerging markets are getting a second look. The 13F filing season always reveals where smart money is rotating. This time, it’s moving away from promises and toward cash-generating AI bets trading at reasonable multiples.

The question for other investors: Are you following the profit-takers or the profit-makers?