Philippe Laffont isn't too concerned about AI jitters percolating in the market recently, but he says he's primarily focused on one specific area of the trade that offers best exposure at a better value.
The billionaire founder of Coatue Management, a technology focused hedge fund, recently shared his take on the AI market with CNBC. Laffont revealed that he sees the most opportunity in the semi-cap corner of the tech sector, pointing to firms that provide critical components to chip fabrication plants.
"If I'm a supplier to the fabs, I don't need to make an exact bet on which of the chips is going to win," he stated. "That's sort of the reason why we own the semi-cap stocks."
The term semi-cap refers to semiconductor capital equipment stocks, companies that sell the machines, tools, and systems upon which chip fabrication plants rely to build their AI-enabling hardware.
Demand for these processors, particularly memory chips, is booming, but Laffont says that employing the classic "pick-and-shovel" strategy is the best way to play the AI boom, rather than try to identify which chip maker is the best positioned to maintain its dominance.
"Sometimes you can capture some of these stocks through others, and you can make a lot of money sometimes thinking who's around the hoop," he noted. "In my case, I think, okay, you've got Nvidia, you've got Amazon with a training chip, you've got Google with a TPI chip, you've got newcomers on the GPU side, all of them, at the end of the day, will need the same machines."
Laffont didn't offer examples of any semi cap stocks that he's particularly bullish on, but in May 2026, he revealed that the fund had taken a significant position in ASML Holding, a Dutch company that produces lithography machines used by chipmakers.
A May 2026 13F filing shows that Coatue owned roughly 496,234 shares of ASML. The stock has performed well in 2026, rising 52% year-to-date. Other semi cap names in the firm's portfolio include Applied Materials and Lam Research, which produce software and equipment needed for chip fabrication. Both stocks have year-to-date gains of more than 100%.
While these semi cap stocks have performed well, Laffont also highlighted the possibility of holding flexible positions that the firm can exit quickly, particularly in the current market.
"One of the advantages of investing in technology, it is a pretty liquid market," he said. "From a portfolio perspective, we'll try to always own positions that if something changed, we could choose to change our mind."
