Major hedge funds have made significant moves in the AI market, ditching some of the leading names in the industry ahead of a third-quarter sell-off. According to recent regulatory filings, billionaire investors have been selling off stakes in key players such as Nvidia, Alphabet, and Meta Platforms, all of which contributed to this year’s market gains. This selling spree occurred just before a volatile period for AI trading, with investors seeking to secure profits from 2024’s high-flying stocks.
The unwind in the yen carry trade and a weak July jobs report have raised recession concerns and added to the market’s volatility. Stocks of companies like Alphabet, Microsoft, and Amazon have taken a hit since the beginning of the third quarter, prompting hedge funds to reassess their positions in these AI giants.
Renowned investors like Stanley Druckenmiller and David Tepper have been vocal about their concerns regarding the overhyped nature of the AI market. Druckenmiller revealed that he sold a significant portion of his Nvidia stake in March as the stock surged from $150 to $900. Other hedge funds, including Appaloosa and Soros Capital, followed suit by liquidating their positions in Nvidia.
Alphabet also faced heavy selling pressure from hedge funds in the last quarter, with notable investors such as Daniel Sundheim’s D1 Capital reducing their stakes in the tech giant. Similarly, leading hedge funds like Loeb, Tepper, and Pershing Square trimmed their positions in Alphabet, reflecting a cautious approach towards AI stocks.
Apart from Nvidia and Alphabet, hedge funds have also reduced their positions in other tech behemoths like Amazon, Microsoft, and Apple. Appaloosa, Druckenmiller, and other major players slashed their stakes in these companies, signaling a shift in sentiment towards mega-cap tech stocks.
While some investors have scaled back their exposure to AI names, others have doubled down on major technology trades. Funds like Loeb’s Third Point increased their bets on Apple and Amazon, underscoring a diverse range of views within the investment community.
The filings provide insights into the changing landscape of the AI market, with hedge funds adjusting their positions based on evolving market conditions. As AI stocks continue to face scrutiny, investors are reevaluating their strategies to navigate the uncertain terrain of the tech sector.
