Kevin Simpson's Latest Trades: Trimming Alphabet, Buying Palantir, Selling Vertex

Alphabet (GOOGL) Trim

• 💡 Kevin Simpson trimmed Alphabet holdings due to concerns about advertising dollars shifting from Google Search to AI competitors like ChatGPT.
• ⚠️ While acknowledging Alphabet's AI capabilities (Gemini), Simpson believes Gemini won't capture the full 20% of ad revenue that could be lost.
• 🔍 The analogy of Xerox is used to question Google's long-term relevance if it doesn't adapt, though Simpson believes Alphabet's talent and IP will help it remain relevant.
• 📊 Despite concerns, the stock's multiple has already decreased, suggesting some of these issues might be priced in.

Palantir (PLTR) Purchase

• 🚀 Simpson initiated and increased a position in Palantir, despite its high forward P/E ratio of 191x.
• 💰 The strategy involves writing covered calls against the position to generate premium, mitigating the high valuation.
• 📈 Palantir's commercial business grew 70% year-over-year, and government contracts also increased, indicating strong growth potential.
• ⚠️ Other panelists expressed concern over Palantir's valuation, with some waiting for a more significant pullback.

Vertex Pharmaceuticals (VRTX) Sale

• 📉 Simpson sold Vertex Pharmaceuticals as a risk management move ahead of earnings, using a covered call strategy.
• 📞 A covered call generated $19.50, and the subsequent earnings miss and stock drop allowed him to hedge half the decline, effectively stopping out of the position.
• ✅ This sale was purely for risk management, not a reflection of long-term concerns about Vertex's fundamentals.