The smart money on Wall Street was putting cash into semiconductors in the first three months of the year, but there is no consensus over China.
Those are the takeaways from a look at the holdings of a list of star investors as of the end of March. The Securities and Exchange Commission requires anyone managing at least $100 million in publicly traded assets to disclose their holdings within 45 days of the end of each quarter.
Ray Dalio’s Bridgewater Associates, the largest hedge fund in the country with more than $150 billion in assets under management, boosted its positions in semiconductor makers
Broadcom
(ticker: AVGO) and
Lam Research
(LRCH). It also added to its holdings of
Microsoft
(MSFT), according to the firm’s latest so-called 13-F filing.
Microsoft has invested billions of dollars in OpenAI, which released the wildly popular ChatGPT late in 2022. Bridgewater would gain to the extent that Microsoft benefits from the chatbot, which can hold a conversation nearly like a human being and rapidly generate sophisticated content by scraping the Internet. Semiconductor makers stand to gain because AI technology requires lots of computing power.
Aggregated data from Bloomberg covering all 13-F forms for the first quarter show investors bought 38 million shares of
Advanced Micro Devices
(AMD), lifting their total position by 5%. They also bought 27 million shares of
Nvidia
(NVDA), increasing their combined stake by 2.4% from the previous quarter.
Investors seem less enthusiastic about Microsoft, perhaps because of the stock’s spectacular gains this year. Microsoft shares were up 30% year to date as of the close on Tuesday. Filers of 13-F forms shed a combined 22 million shares in the first quarter, slightly reducing their total holdings of 3.7 billion shares.
Hedge fund investors are also divided over China’s tech giants. Michael Burry, whose bet against the U.S. mortgage market before the 2008-09 financial crisis made him famous in the book and movie The Big Short, added to his positions in the Chinese e-commerce companies
JD.com
(JD) and
Alibaba
(BABA).
Burry’s Scion Asset Management first purchased the two stocks in late 2022, betting that they would take off as China ended its zero-Covid policy of stringent lockdowns. The two companies are now the largest holdings in his stock portfolio, at 20% of assets.
Alibaba shares declined 3% year to date, while JD stock lost one third of its value.
Many of Burry’s peers didn’t share his optimism. Sales of Alibaba stock across all filers of 13-F forms amounted to more than 20 million shares, Bloomberg data show. That represents nearly 7% of their total holdings as of the end of last year.
The group of investors also sold 5 million shares of JD stock, reducing their holdings by about 3% from the end of December.
The
MSCI China Index
is flat for the year, as the post-lockdown economic recovery there shows signs of slowing down. Investors are also worried about tensions between the U.S. and China. American lawmakers have been questioning whether popular short-video app TikTok, owned by Chinese firm ByteDance, has been sharing U.S. user data with the Chinese government or pushing propaganda on its behalf.
Investors are also closely watching Warren Buffett’s
Berkshire Hathaway
(BRK.B). In the first quarter, Berkshire took on new stakes in
Capital One Financial
(COF) and alcoholic beverage maker
Diageo
(DEO), while pulling back from
Bank of New York Mellon
(BK), Taiwanese chip maker
TSMC
(TSM), and furniture retailer
RH
(RH). Berkshire also increased its stakes in
Apple
(AAPL) and
Occidental Petroleum
(OXY), while reducing holdings in
Chevron
(CVX) and
General Motors
(GM).
While 13-F filings can offer a peek at what hedge funds and other big investors are doing, investors should remember that the reports can reflect investment decisions made months ago because companies are only required to file up to 45 days after the quarter is complete. Fund managers aren’t required to report short sales, so holdings in their portfolios could also be hedges against those positions.
—Al Root contributed to this article
Write to Evie Liu at [email protected]
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