Wall Street’s largest hedge funds, Bridgewater Associates, Tiger Global Management and Discovery Capital, increased their exposure to Big Tech in the second quarter amid a generational boom in the growth of artificial intelligence.
During the June quarter, hedge funds cut their exposure to laggards in industries like aerospace and defense, and consumer and retail, as part of a broader move back to momentum investing.
It marks a big shift from earlier this year when bets on Big Tech had soured for top money managers due to tariff-fueled volatility in financial markets, with investor concerns around rising inflation and fears of a bubble in AI triggering a sell-off in “Magnificent Seven” stocks.
Since then, tech stocks have staged a big comeback. The S&P 500 (.SPX), opens new tab is up 10% so far this year, buoyed largely by the largest tech companies, which account for nearly a third of the combined market cap of companies on the index.
Outside technology, some hedge funds, such as Lone Pine and Discovery, also bet on UnitedHealth Group (UNH.N), opens new tab. Berkshire Hathaway (BRKa.N), opens new tab and Michael Burry’s Scion Asset Management also unveiled bets on the insurer, while Soros Fund Management boosted an existing position.
Shares in UnitedHealth are down 46% this year, as the company faces rising costs, a U.S. Department of Justice probe, a cyberattack and the shooting of former top executive Brian Thompson last December.
The fund’s positions were revealed in quarterly securities filings known as 13Fs. While backward-looking, these filings typically reveal what funds owned on the last day of the quarter and are one of the few ways hedge funds and other institutional investors have to declare their positions.
Below are the details of the changes in the holdings of the top hedge funds:
BRIDGEWATER ASSOCIATES
Bridgewater Associates added more shares in Nvidia (NVDA.O), opens new tab, Alphabet (GOOGL.O), opens new tab and Microsoft (MSFT.O), opens new tab in the second quarter.
The macro hedge fund founded by Ray Dalio more than doubled its bets in Nvidia. It ended June with 7.23 million shares in the chipmaker, or 154.5% more than it had at the end of March. Nvidia was Bridgewater’s biggest bet in a single stock, totaling $1.14 billion.
Its holdings in Alphabet and Microsoft went up by 84.1% and 111.9%, respectively, amounting to $987 million and $853 million.
Other AI-related stocks added were Broadcom (AVGO.O), opens new tab (+102.7%), to 317.8 million shares, or $317 million, and Palo Alto Networks (PANW.O), opens new tab (+117%), to 313.8 million, or $314 million.
DISCOVERY CAPITAL
Discovery Capital, whose founder Rob Citrone has recently been bullish on Mexico’s America Movil (AMXB.MX), opens new tab due to its exposure to Latin America, doubled its stake in the wireless provider during the second quarter.
For the quarter ended June 30, the fund amassed another 2.65 million shares, valuing its current holding in America Movil at about $95 million.
Citrone’s hedge fund, which generated a 52% windfall on its investments last year, has increased its exposure to Latin America as part of a strategy to diversify from U.S. holdings.
Source: https://www.reuters.com/