Wall St hedge funds reduced megacaps in the third quarter

According to the most recent quarterly disclosures, Wall Street's biggest hedge funds have reduced their exposure to certain Magnificent Seven companies, such as Nvidia and Alphabet, and placed new bets on sectors like application software, ecommerce, and payments. The following are some key positions changes made by the funds.

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Bridgewater Associates outperformed its peers in the first nine-month period of the year, and it slashed the stakes in Nvidia to nearly two thirds, or 2.5 million shares, as well as Alphabet to more than half, or 2.65 million. The firm has also reduced its stakes in Amazon.com and Broadcom, two of the most important semiconductor companies in the industry.

In a recent note to investors, Bridgewater's chief investment officers, Karen Karniol-Tambour, Greg Jensen and Bob Prince, warned of mounting risks to the current market stability and the limits of artificial intelligence boom. Bridgewater's chief investors, Karen Karniol Tambouur, Greg Jensen, and Bob Prince warned recent investors of increasing risks to current market stability, and of the limits of artificial intelligence boom. Dalio founded Bridgewater in 1975. He recently sold the remaining shares he owned in the company. The hedge fund manages assets worth $92.1 billion.

Discovery Capital, founded by Rob Citrone and led by Rob Citrone has taken new positions with companies such as Cleveland-Cliffs, Cigna, Elevance Health, and Alphabet.

Citrone’s hedge fund has increased its exposure in Latin America to diversify away from U.S. investments.

The fund sold positions in EQT and Antero Resources, two energy companies, and Range Resource. It also placed a bet with oilfield services company Baker Hughes. Discovery has also increased its stake in Ramaco Resources, a critical minerals producer. Citrone, the man who had earlier in the year chosen Mexico's America Movil, as his favourite stock because of its exposure to several countries in Latin America has now reduced his stake in the company from 4.68 million to 4,68 million shares. This valued the stake at approximately $98.3 millions.

BALYASNY - ASSET MANAGEMENT Dmitry Balyasny’s multi-strategy fund Balyasny Asset Management, which manages a variety of hedge funds, increased its stake in iPhone maker Apple by several folds while others such as Berkshire Hathaway reduced their exposure to this tech giant.

Balyasny, like many of its peers, reduced its stake in Amazon to about 41%.

The firm has also taken on new positions with digital infrastructure company American Tower and insurers American International Group, as well as increasing its position at Allstate.

TIGER GLOBAL MANAGEMENT Tiger Global Management was founded by Chase Coleman and has been led by him since. During the third quarter, they reduced their stake in Meta Platforms. Tiger Global's holdings in Meta were reduced to 2.8 millions shares during the third quarter, valued at $2.1 billion. The firm also sold its stakes in other prominent names, including Eli Lilly LLY.N and Novo Nordisk NOVOb.CO as well as cybersecurity firm CrowdStrike CRWD.O. Tiger Global, a subsidiary of Julian Robertson’s investment firm, and a member of the Tiger Cubs group of funds that specialize in stock picking, has taken new positions with Netflix NFLX.O, and Klarna KLAR.N, a company that offers a buy-now, pay-later service.

COATUE MANAGEMENT

Coatue Management, the billionaire's investment firm, made several changes to its portfolio around AI giants. The firm has reduced its stake in the AI industry leader Nvidia from 14.1% to 9,9 million shares. This is similar to other prominent firms like Bridgewater Asset Management and Michael Burry’s Scion Asset Management who have also reduced their exposure. Burry announced earlier this week that he was closing his hedge fund, after warning about an AI bubble on the market.

The firm reduced its exposure to tech shares Tesla, Amazon, CoreWeave, and Arm Holdings, by 15,1%, 13,9%, 62.2%, and 51.2% respectively. It also exited its positions in Eli Lilly, and tobacco giant Philip Morris. Coatue increased its stakes in Microsoft, Meta and Alibaba, while reducing exposure to other Big Tech names.

(source: Reuters)