Billionaire Philippe Laffont of Coatue Management Is Piling Into 3 Highly Volatile Momentum Stocks

Globe and Mail

6 hours ago

Nothing holds more importance on Wall Street than data. The problem is the amount of data announced via earnings reports and economic releases can easily overwhelm investors and allow something of importance to be overlooked.
For instance, May 15 marked the deadline for institutional investors with at least $100 million in assets under management to file Form 13F with the Securities and Exchange Commission. This filing provides investors with a snapshot of which stocks Wall Street's brightest money managers bought and sold in the previous quarter (the first quarter, in this case). Because of earnings season and the monthly inflation report, investors could have easily overlooked this deadline.
Even though 13Fs aren't perfect -- they can provide a stale snapshot for active hedge funds -- they're helpful in identifying which stocks and trends are piquing the attention of Wall Street's leading money managers.
While Berkshire Hathaway 's Warren Buffett is typically the most-followed of all asset managers, he's not the only billionaire with a keen eye for value or potential moneymakers. Coatue Management's billionaire chief, Philippe Laffont, has an affinity for picking out a mix of growth, value, and momentum stocks for the nearly $22.7 billion investment portfolio he oversees.
During the March-ended quarter, Laffont began piling into three highly volatile momentum stocks.
QuantumScape
The first exceptionally volatile stock that Laffont couldn't seem to get enough of in the first quarter is solid-state lithium-metal batteries developer QuantumScape (NYSE: QS). Coatue's 13F shows that 4,294,995 shares were gobbled up in the March-ended quarter, which in hindsight looks like a smart move.
Over a two-day stretch (June 25 and June 26), shares of QuantumScape skyrocketed by 77%. The fire igniting this rally is the company's announcement that its Cobra separator process had entered baseline production. Cobra is QuantumScape's foundational puzzle piece that allows for the mass-production of solid-state batteries for electric vehicles (EVs). More importantly, the company's process aims to meaningfully reduce production costs, all while extending battery life and shortening charging times.
In addition to bringing Cobra into baseline production, QuantumScape reached this milestone ahead of schedule. Most startup companies run into unforeseen issues and delays when attempting to get production off the ground. Wall Street is rewarding QuantumScape for exceeding expectations.
While the addressable market is sky-high for solid-state batteries in EVs, consumer demand for EVs, for a variety of factors, has been anything from but sky-high of late. Higher auto loan rates, uncertainties regarding the U.S. economy and President Trump's tariff and trade policy, and a lack of EV infrastructure nationwide, are all reasons EV sales have slumped. Until these issues are addressed, there's a lot of fluidity to QuantumScape's future sales.
Furthermore, it's fair to be skeptical of a company that, despite entering into baseline production with its newest battery technology, isn't generating any revenue at the moment, is losing a lot of money each quarter, and boasts a $4.3 billion market cap. Suffice it to say, QuantumScape is an intriguing story stock, but one that has a lot to prove to investors.
Plug Power
A second momentum stock that billionaire Philippe Laffont chose to pile into in the March-ended quarter is hydrogen fuel-cell company Plug Power (NASDAQ: PLUG). Coatue Management scooped up 4,098,713 shares of Plug through the first three months of 2025. While shares of the company are down 43% year to date, as of the closing bell on June 26, they've surged 74% since May 15.
Plug Power is a company that's wagering on a "green" future. Though it's roots tie to hydrogen fuel cells found in industrial forklifts, the company's ambitious plan is to oversee electrolyzer plants and infrastructure to supply hydrogen-powered applications.
Once again, the addressable market for hydrogen-powered vehicles is substantial. The ability to move away from fossil fuels and toward clean energy has been enticing enough for Plug Power to land partnerships and equity stakes. Just three weeks ago, Plug Power announced an expanded strategic collaboration with Allied Green Ammonia in Uzbekistan, which will rely on Plug's electrolyzer technology for green chemical production.
Although Plug Power is further along in the development process than QuantumScape, it shares the same issue in that its operating model is unproven and it's losing money hand over fist. Despite charting a path to positive operating income in 2027 and overall profitability the following year, Plug Power lost more than $2.1 billion last year and has seen its losses balloon in successive years.
What's more, since the company is burning through cash at an alarming rate as it expands its green hydrogen infrastructure, it's regularly relied on selling its own stock as a means to raise capital. This is to say that Plug Power's shareholders are commonly being diluted by share issuances designed to keep the lights on. More of these share sales are expected, which is likely to curb any near-term upside in the stock.
CoreWeave
The third highly volatile momentum stock that Coatue Management's billionaire investor piled into in the first quarter is artificial intelligence (AI)-data center infrastructure giant CoreWeave (NASDAQ: CRWV). Coatue's 13F shows that Laffont picked up 14,402,999 shares of Wall Street's hottest initial public offering, whose shares are higher by 305% since the company went public on March 28.
The beauty of CoreWeave's operating model is that it caters to businesses seeking out compute capacity. CoreWeave acquired 250,000 Hopper (H100) graphics processing units (GPUs) from Nvidia (NASDAQ: NVDA) with the goal of leasing out its data center space to needy businesses. Selling its existing chips every five or six years and upgrading to newer/faster hardware should allow CoreWeave to stay relevant and be highly profitable.
But to keep with the theme here, CoreWeave's operating model is still in its early stage of expansion and remains unproven. The company had to rely heavily on debt financing to purchase its GPUs, with debt-servicing costs helping to balloon its net loss.
Nvidia's accelerated innovation cycle is another potential concern for CoreWeave. Nvidia CEO Jensen Huang is attempting to bring a new advanced chip to market each year. While this should help his company maintain its huge lead in compute capabilities, it could quickly depreciate the value of prior-generation AI-GPUs, such as Hopper. That means CoreWeave's assets may be worth far less than realized a few years from now. Furthermore, it might entice customers to pass on CoreWeave in favor of data centers with newer chips.
Lastly, the jaw-dropping addressable market for AI could be constrained by historical precedent. No next-big-thing trend in more than 30 years has escaped an early innings bubble-bursting event. While AI has the look of a game-changing technology over the long run, businesses aren't anywhere close to optimizing this technology as of yet. This suggests investors have, once again, overestimated early stage utility and adoption rates. If the AI bubble were to burst, companies with premium valuations like CoreWeave would be likely to take it on the chin.
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