Big tech in focus for hedge funds in Q2

Hedge funds bought into some of the biggest technology names in the second quarter to capture the sector’s sizzling rally and hype over artificial intelligence, according to the latest quarterly reports investment managers filed with the US Securities and Exchange Commission.

Institutional investors added 5.7 million shares of Meta Platforms Inc. at $6.7 billion, the biggest increase by market value for a single stock in the three months through June. They also bolstered positions in Microsoft Corp. and Apple Inc., according to Bloomberg’s analysis of data from 13F filings. Nvidia Corp. and Advanced Micro Devices Inc., both in focus for their AI advances, are among popular companies that hedge funds and top investors piled into. 

Optimism that the US Federal Reserve is nearing the end of its tightening campaign has helped the tech-heavy Nasdaq 100 Index surge 39% so far this year, erasing its 33% slump last year. That said, Intel Corp. was an outlier with the biggest decrease in aggregate position of 41 million shares being sold. Some investors are concerned that the chipmaker could be left behind as its products are ill-suited for AI’s tech needs.

Meanwhile, institutional investors reduced the value of their investment in Alibaba Group Holding Ltd. Among those, Michael Burry’s Scion Asset Management, ditched its stake in China’s tech giant just months after doubling down on the shares. 

Bloomberg has so far analyzed 13F filings by 878 hedge funds. Their combined holdings amounted to $1.058 trillion, compared with $974.74 billion held by the same funds three months earlier.

Technology accounted for the biggest weighting in the investor group’s portfolios, at 28%, followed by healthcare at 16%. The value of investments in energy fell by the most for any industry. The biggest increase was for technology.

• Renaissance Technologies LLC sold 1.45 million shares in UnitedHealth Group, the biggest reduction by the investor group; Winslow Capital Management LLC sold 1.02 million shares
• Arrowstreet Capital LP sold 21.4 million shares in Intel, the biggest reduction by the investor group; Two Sigma Advisers LP sold 10.51 million shares
• Arrowstreet Capital LP added 3.71 million shares in Meta Platforms Class A, the largest increase; Renaissance Technologies LLC added 2.62 million shares
• Oaktree Capital Management LP added 40.49 million shares in Garrett Motion, the largest increase; Cyrus Capital Partners LP added 24.67 million shares
• Microsoft was cut or reduced by 165 investors, the biggest such number; Amazon.com was increased or initiated by 172 investors, the biggest tally
• Microsoft was the most valuable overall holding at $33.02 billion

Companies that were involved in M&A deals, spin-offs, IPOs and SPAC plays during the quarter were excluded from the story. The data are preliminary and may be impacted by amended 13F filings. Market value changes are adjusted for corporate actions such as normal cash dividends.

This story was produced with the assistance of Bloomberg Automation.