Three high-conviction stock picks by a $28 billion fund have each lost at least 23% of their value since the positions were established, raising the question of whether the underlying investment cases remain intact.
Axiom Investors, which oversees $28.1 billion in assets, disclosed its largest new positions in Advanced Micro Devices (NASDAQ: AMD), GE Vernova (NYSE: GEV), and Lumentum (NASDAQ: LITE) as of June 30, in a 13F filing submitted August 12.
The filing revealed $11.56 billion spread across 133 US stock positions, with the three names collectively representing more than 11% of those disclosed holdings.
Lumentum has since become a different kind of investment altogether, after Marvell Technology (NASDAQ: MRVL) agreed on November 2 to acquire the company at a ratio of 4.5 Marvell shares per Lumentum share.
That deal was valued at roughly $1,132 per Lumentum share when it was announced, but with Marvell trading at $134, the implied offer had fallen to approximately $601, and Lumentum’s stock was changing hands about 15% below even that diminished figure.
A Chinese antitrust review adds further uncertainty, with the regulatory process potentially running 12 to 18 months, while Lumentum’s fiscal first-quarter revenue did surge 136% to $1.26 billion before the deal closed the chapter on its independence.
AMD’s position is more straightforward: Axiom opened a fresh stake of 879,325 shares worth $511 million, representing 4.4% of its disclosed US holdings, and the chipmaker subsequently delivered third-quarter revenue of $13.38 billion that beat analyst estimates.
Data center revenue climbed 97% to $8.5 billion and management guided for approximately $17 billion in fourth-quarter revenue, yet the stock has still retreated 23% from its June 30 price, closing Friday at $449 against an average analyst target of $656.
A significant structural complication shadows AMD’s upside: warrants granted to OpenAI and Meta covering up to 320 million shares, equal to 19.6% of shares outstanding, triggered a $1.1 billion charge in the third quarter and effectively dilute future gains.
GE Vernova presents arguably the cleanest fundamental picture of the three, despite suffering the steepest decline, with its shares down 34% from June 30 after falling further when Democrats secured control of Congress.
Axiom had increased its GEV position by 48% during the June quarter to 411,058 shares worth $483 million, and subsequent results showed third-quarter orders surging 96% organically to $29.3 billion.
Management lifted its full-year free cash flow guidance to $16-$17 billion from a prior range of $11.5-$12.5 billion, though $5.3 billion of the third quarter’s $5.4 billion in cash flow derived from working capital, primarily customer down payments.
GE Vernova’s 2028 earnings per share estimate has risen to $37.11 while the stock now trades at roughly 33 times forward earnings, below every quarter-end valuation recorded since the company’s 2024 spinoff, giving bulls a valuation argument that has only strengthened through the selloff.
The principal risk for GEV is political: approximately 20% of its contracted gas-power gigawatts are destined for data centers, a segment that could face headwinds if the new Congressional majority moves to slow that buildout.
