Lewis Sanders is making some interesting moves. His Q3 2026 portfolio tells a pretty interesting story. I went through Sanders Capital's Q2 vs. Q3 2026 13F holdings. A few changes caught my attention, particularly the additions to NVIDIA, Royal Caribbean and Lockheed Martin, alongside reductions in several semiconductor and financial holdings. For some context, Lewis Sanders founded Sanders Capital in 2009. Before that, he spent 32 years at Sanford C. Bernstein, eventually becoming its Chairman and CEO, and later led AllianceBernstein. Sanders Capital manages more than $138 billion. Sanders has built his investment philosophy around finding businesses where the market is too pessimistic about the underlying economics and the possibility of recovery. That's worth keeping in mind when looking at these changes. 1. $NVDA: More exposure to the AI infrastructure opportunity Sanders increased NVIDIA from 22.56 million to 29.95 million shares. That's another 7.39 million shares, a 33% increase. The reported position value went from approximately $4.51 billion to $6.84 billion. This is a substantial addition to an already enormous position. Pretty interesting to see this..actually. What interests me is that this happened while Sanders reduced $TSM and $AMAT. One possible interpretation is a preference for the company capturing the economics of AI compute rather than some of the companies supplying the underlying semiconductor manufacturing equipment and production capacity. NVIDIA has a different competitive position. Its GPU architecture, CUDA ecosystem, networking products and software integration make it much harder to evaluate as simply another semiconductor company. The question is whether NVIDIA can continue capturing an outsized share of AI infrastructure spending as customers become increasingly concerned with returns on their capital expenditure. Sanders appears willing to increase exposure to that opportunity. Whether the valuation adequately compensates investors for the expectations already embedded in the stock is a separate question. I don't have the answer to it. 2. $RCL: An increasingly interesting bet on the cruise industry This was one of the biggest additions. Royal Caribbean increased from 2.60 million to 4.84 million shares, an 86% increase. The reported position value increased from approximately $827 million to $1.29 billion. I find this more interesting than another increase in a mega-cap technology company. Cruise operators have a particularly interesting business model. They operate with substantial fixed costs, significant capital requirements and considerable operating leverage. When occupancy, ticket pricing and onboard spending improve, incremental revenue can translate into disproportionately higher operating profits. Royal Caribbean also benefits from its scale, established brands, private destinations and an increasingly differentiated vacation offering. But the other side of that equation matters. These businesses are capital-intensive, exposed to consumer spending and vulnerable to fuel costs, financing conditions and economic downturns. The investment question is whether the market is properly valuing the durability of cruise demand and the earnings potential of Royal Caribbean's expanding capacity. An 86% increase in shares makes this position worth investigating. 3. $LMT: Increasing exposure to defense Lockheed Martin increased from 2.09 million to 3.03 million shares. That's approximately 937,000 additional shares, a 45% increase. Sanders also maintained substantial positions in $GD, $NOC and $RTX. This is interesting because defense is not simply a bet on the next geopolitical headline. The investment case rests on long-term procurement requirements, replenishment of military inventories, missile defense, aircraft modernization and the growing importance of advanced weapons systems. Lockheed has an established position in programs such as the F-35 and missile defense systems. Its backlog provides some revenue visibility, although contract execution, cost overruns and government procurement decisions remain important risks. I would be interested in understanding whether Sanders sees a prolonged defense spending cycle that the market is still underestimating. 4. $MA: More Mastercard, but not more Visa Mastercard increased from 2.33 million to 2.94 million shares, a 26% increase. Meanwhile, $V was essentially unchanged in share count. Both companies benefit from the structural shift toward electronic payments, cross-border transactions and increasingly sophisticated payment services. However, Mastercard has meaningful exposure to international payment growth and cross-border transaction volumes. One possible explanation is that Sanders sees a more attractive risk/reward opportunity in Mastercard at its prevailing valuation. That doesn't necessarily mean he prefers Mastercard's business over Visa's. Position sizing and valuation matter just as much as business quality. Still, the difference in their reported share counts is worth watching. 5. Where Sanders reduced exposure There were several meaningful reductions: $AMAT: Down 932,361 shares (-15%). $HSBC: Down 788,323 shares (-30%). $TSM: Down 1.69 million shares (-6%). $SPY: Down 221,894 shares (-11%). $UNH: Down 192,342 shares (-3%). He also completely exited $PG, previously holding approximately 6.65 million shares. $SYF was eliminated as well, although it was a very small position. A few of these deserve further investigation. The $AMAT reduction is particularly interesting alongside the NVIDIA addition. Applied Materials is exposed to semiconductor manufacturing equipment, an industry with long-term structural demand but cyclical spending patterns. Perhaps Sanders sees a better return opportunity in NVIDIA than in the equipment suppliers. Alternatively, this could simply reflect differences in valuation and portfolio sizing. The $HSBC reduction is another one I'd investigate. International banking can offer attractive valuations, but investors need to account for credit quality, interest-rate sensitivity, capital requirements and geographic exposure. As for $PG, I wouldn't automatically interpret the exit as a bearish view on consumer staples. A high-quality business can still become an unattractive investment when its prospective return no longer justifies the price. That's an important distinction. 6. A new position in $LYG Sanders initiated a position in Lloyds Banking Group, purchasing 30,900 shares. It's relatively small compared with the firm's largest holdings, but I find the addition interesting. Lloyds is heavily exposed to the UK banking and mortgage market. Its investment case involves deposit economics, net interest income, credit quality, capital returns and the valuation assigned to its earnings. UK banks have historically traded at substantial discounts to many US financial institutions. The question is whether that discount adequately reflects their risks or creates an opportunity for investors willing to look beyond the headline valuation. I'd like to examine Lloyds' tangible book value, return on tangible equity, capital position and normalized earnings before drawing any conclusions. 7. The mega-cap positions were largely unchanged One thing that shouldn't get lost in the discussion is that Sanders didn't make a wholesale retreat from large-cap technology. His reported share counts changed very little: $MSFT: -0.3% $AMZN: -0.3% $GOOG: -0.5% $AAPL: -0.4% $META: -0.2% $AVGO: -0.2% In other words, the firm largely maintained its exposure to some of the largest technology businesses in the world. The increase in reported market values for several of these holdings was largely attributable to changes in market prices, not additional purchases. What I'm taking away from this portfolio I see three areas worth investigating further. First, the semiconductor changes. Sanders increased $NVDA while reducing $TSM and $AMAT. I want to understand whether this reflects a valuation-driven preference for the economics of the AI platform over the broader semiconductor supply chain. Second, the additions to $RCL and $LMT. These are completely different businesses, but both have identifiable long-term demand drivers. The important question is whether their current valuations adequately reflect normalized earnings, capital requirements and downside risks. Third, the financial holdings. Increasing $MA, initiating $LYG and reducing $HSBC presents an interesting set of opportunities to compare. I want to look at what the market is pricing into their earnings power, capital returns and long-term growth. I'm not interested in copying a 13F simply because a prominent investor owns something. I want to understand the underlying business, what has changed, what the market might be overlooking and, most importantly, what price would make the investment attractive. A great business isn't automatically a great investment. I'm digging into these positions now to see if there are opportunities worth adding to my own research list. That's the part of institutional portfolio tracking I find most useful: not following the trades, but using them to find businesses that deserve a closer look. Oh..and he added $PDD as well.
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