Recent regulatory filings reveal that several hedge funds are expanding their investments in major technology stocks such as Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Meta Platforms (NASDAQ:META), even as these companies faced some setbacks during the third quarter after driving broad market gains throughout the year.
Tiger Global Management, a highly monitored fund in the investment realm, notably increased its holdings in Nvidia (NASDAQ:NVDA), whose semiconductors power artificial-intelligence systems, by an impressive 77% in the third quarter. The fund also augmented its position in Alphabet (NASDAQ:GOOGL) by 40%, according to the filings.
Furthermore, Tiger Global elevated its investment in Meta by 4%, upped its stake in Microsoft by 8%, and increased its position in Amazon by 6.5%.
Despite enduring substantial losses in 2022 when technology stocks experienced a downturn, many fund managers redirected capital toward the sector this year. This strategic move was particularly evident as seven major tech stocks ascended, playing a pivotal role in the broader stock market’s recovery following last year’s decline.
Bill Ackman, whose Pershing Square Capital Management is closely followed for investment insights, reported nearly doubling his stake in Alphabet Inc. Class A shares, now owning 4.4 million shares at the end of the quarter.
Daniel Loeb’s Third Point revealed a new investment in Meta, holding 1.1 million shares at the quarter’s close.
Coatue Management, founded by Philippe Laffont, demonstrated confidence in Meta by increasing its position by 9%, holding 6.2 million shares as of September 30, as per the filings.
Glen Kacher’s Light Street Capital increased its stake in Amazon by 5% after establishing a new position in the online retailer during the second quarter.
Ratan Capital Management reported significant expansions, disclosing a 72% increase in its Amazon holdings and a 67% boost in its Meta stake. The fund also initiated a position in Alphabet, holding 20,000 shares as of September 30.
Goldman Sachs reported in late August that hedge funds held record exposure to the seven largest tech stocks by market capitalization.
The year 2023 has proven more favorable for investors, with the S&P 500 stock market index rising by 18% since January after a 20% drop in 2022. The impressive rally has largely been driven by a select number of companies, often referred to as the “magnificent seven.”
Since January, Meta’s share price has surged by 169%, Amazon gained 70%, and Microsoft is up by 53%.
Investment managers are required to disclose their U.S. stock holdings at the end of each quarter and report this information to the Securities and Exchange Commission 45 days after the quarter’s close. The deadline for these so-called 13-F filings for the third quarter is Tuesday.
While 13-F filings provide a retrospective view, they are closely scrutinized by investors for emerging trends.
However, during the third quarter, investors, many of whom suffered substantial losses just last year, displayed caution as markets faced challenges, and specific tech stocks experienced some decline.
Light Street reduced its stake in Meta by 31%, following a 27% increase in the second quarter, and Coatue diminished its stake in Microsoft by 28% while also reducing its Amazon stake by 15%.
Representatives for the funds did not immediately respond to requests for comment.
