Hedge Funds Add Apple, Reshuffle Technology Portfolio

Hedge funds continued to buy into some of the biggest technology companies including Apple Inc. in the second quarter while trimming positions in Nvidia Corp., as they reshuffle their positions in the artificial intelligence boom that had fueled a blistering rally in the US stock market.

The iPhone maker saw the biggest increase by market value for a single stock in the three months through the end of June, according to Bloomberg’s analysis of data from 13F filings. The stock soared nearly 25% during the period, attracting an aggregated net buy of more than 8.5 million shares from hedge funds. Janus Henderson Group Plc. and Third Point LLC. were among funds that added Apple. Shares in the company edged higher, rising  in premarket trading. 

Hedge funds also boosted their exposures in other AI-related companies like Amazon.com Inc and Taiwan Semiconductor Manufacturing Co Ltd, according to the data. At the same time, funds sold shares in AI darling Nvidia Corp. in the second quarter as they took their profit from the frenetic rally. Microsoft Corp. was cut or reduced by 140 investors, the biggest such reduction.

Michael Burry’s Scion Asset Management continued to boost its stake in China’s tech giant Alibaba Group Holding Ltd., while slashing his overall equity portfolio in half, according to data compiled by Bloomberg. 

The shift in hedge fund holdings came as the S&P 500 Index climbed 3.9% in the second quarter, adding to a 14% rally during the first half of 2024 aided by a resilient economy and solid corporate earnings. But conditions have since changed. In July, Wall Street managers started to move out of large-cap names and piled into smaller and riskier sectors. And global stock markets were hit by a massive selloff at the beginning of the month, driven by worries about a US economic slowdown and a bubble in AI.

Bloomberg has so far analyzed 13F filings by 674 hedge funds. Their combined holdings amounted to $443.46 billion, compared with $427.22 billion held by the same funds three months earlier.

Technology accounted for the biggest weighting in hedge fund portfolios, at 27%, followed by Consumer Discretionary, at 16%. The value of investments in Communications fell by the most for any industry. The biggest increase was for Technology.

• Trian Fund Management LP sold 29.69 million shares in Walt Disney, the biggest reduction by the investor group; Twin Tree Management LP sold 512,934 shares

• Tairen Capital Ltd added 2.8 million shares in Apple, the largest increase; Renaissance Technologies LLC added 1.31 million shares

• Reverence Capital Partners LP added 23.2 million shares in New York Community Bancorp, the largest increase; Renaissance Technologies LLC added 1.25 million shares

• Microsoft was cut or reduced by 140 investors, the biggest such number; Amazon.com was increased or initiated by 166 investors, the biggest tally

• Microsoft was the most valuable overall holding at $26.24 billion

• Warren Buffett’s Berkshire Hathaway Inc. disclosed that it took a new stake in Ulta Beauty Inc. and increased its stake in Sirius XM Holdings Inc.

--With assistance from Subrat Patnaik.

©2024 Bloomberg L.P.