Source: Wall Street News
According to the Goldman Sachs report, hedge funds reduced their holdings of Google, Amazon, Nvidia, Microsoft, and Meta shares in the first quarter. Among the “Seven Sisters,” only Apple was not reduced; instead, hedge fund holdings were increased.
Faced with the unattainable share prices of the “Seven Sisters” of US stocks, US hedge funds are reducing their exposure to large technology stocks and looking for other alpha opportunities.
The Goldman Sachs analyst team led by BenSnider released a report this week showing that hedge fund holdings were reduced in the first quarter$Alphabet-A (GOOGL.US)$/$Alphabet-C (GOOG.US)$,$Amazon (AMZN.US)$,$NVIDIA (NVDA.US)$,$Microsoft (MSFT.US)$und$Meta Platforms (META.US)$Stocks, the only one in the “Seven Sisters”$Apple (AAPL.US)$Their holdings were not reduced by hedge funds; instead, their holdings were increased.
Despite facing a reduction in holdings, except$Tesla (TSLA.US)$Most of the other tech giant stocks are still the most important holdings of most hedge funds.
The world's largest hedge fund Bridgewater Associates significantly increased its holdings in Google, Nvidia, Apple, Meta, and Microsoft in the first quarter, opening new positions to expand Amazon and$Advanced Micro Devices (AMD.US)$This gives the greatest weight to increase holdings in technology stocks. Meanwhile, Appaloosa, a hedge fund owned by David Tepper, a well-known American billionaire investor and hedge fund legend, drastically reduced its holdings of Nvidia and Meta in the first quarter, with holdings reduction ratios as high as 45% and 40%, respectively. Microsoft and Amazon were also opened positions at 18% and 4%, respectively.
While the popularity of giant technology stocks has cooled down, the weight of AI-related stocks in hedge fund portfolios has also soared due to their impressive stock price performance.
Goldman Sachs wrote:
Among all stages of AI investment, the companies that have performed the most recently and are most favored by our customers are those that focus on AI infrastructure investments.
The report shows that the weight of semiconductor stocks in US hedge fund long portfolios soared to 6.5% in the first quarter, reaching a record high.
Hedge funds are paying more and more attention to investment opportunities in the field of artificial intelligence, and are actively laying out all aspects of the AI industry chain.
The report divides investment opportunities in artificial intelligence into three main stages:
Infrastructure: Hardware infrastructure required for the development of artificial intelligence, such as data centers, servers, etc.
Enabling stage: Companies that provide enabling technologies and interfaces for artificial intelligence applications, such as machine learning frameworks, big data tools, etc. These companies generate revenue from products and services related to artificial intelligence.
Productivity: Companies that apply artificial intelligence technology to improve the efficiency and productivity of traditional industries, such as industrial automation, intelligent customer service, etc.
Since mid-2022, the proportion of funds that lay out stocks in the three major investment stages of artificial intelligence (especially computing power) has increased. Currently, at least one-third of hedge funds hold at least one relevant AI stock at every stage.
The following table shows the AI stocks that hedge funds increased and decreased the most in the first quarter of 2024:
editor/tolk