Terry Smiths Latest Investment: Intuit (INTU) as a Market Trouncing Opportunity

Terry Smith, the "English Warren Buffett," is a well-known investor for his long-term strategy of buying and holding companies. However, in the first quarter of 2025, he made a decision to sell off portions of two of his largest holdings in his hedge fund, Fundsmith: Meta Platforms (NASDAQ: META) and Microsoft (NASDAQ: MSFT). Despite the sales, both Meta and Microsoft remain the fund's two largest holdings. Smith's decision to take some shares off the table suggests he sees better opportunities for growth elsewhere. Meta reached a new all-time high in the first quarter due to multiple expansion, while Microsoft's value declined as investors questioned the need for companies to spend heavily on AI chips and compute power. With the capital raised from the sales, Smith reestablished a position in a stock that has been performing well in 2025: Intuit (NASDAQ: INTU). The stock has been a previous holding of Smith from 2017 to 2022, and after a tough period in early 2022, it has finally recovered its 2021 highs this year. Intuit's strong earnings report last month has further boosted its performance, with shares already outperforming the S&P 500 before the report and skyrocketing higher after blowing away earnings expectations. Intuit's TurboTax business has shown strong momentum with its assisted tax service TurboTax Live, which connects users with live tax professionals to help answer questions and complete their tax returns. Management now expects TurboTax Live revenue to grow 47% this year, accelerating from its 17% growth last year. Intuit's other consumer service, Credit Karma, is also growing quickly, with a 31% year-over-year growth during the quarter. The company also offers key enterprise software, including QuickBooks and Mailchimp, which offer Live help and are seeing strong demand. While shares of Intuit trade at a premium valuation of about 33 times forward earnings, the most recent earnings report shows confidence that it can grow into that valuation with strong revenue growth and expanding profit margins. As such, investors can still buy this great company at a fair price. In conclusion, while Terry Smith has sold off portions of his largest holdings in Meta Platforms and Microsoft, he has found a new opportunity in Intuit that he believes has room for further growth. For retail investors, it's not too late to follow suit and invest in this trouncing market performer.