Nvidia, Tesla and Microsoft took the stock market by storm this year. We reviewed the holdings of world-renowned investors to determine who really believes in them

By | December 21, 2023

Nvidia CEO Jensen Huang.Reuters

  • Shares of Microsoft, Nvidia and Tesla have soared this year on the AI ​​buzz.

  • We reviewed the holdings of top investors to find out which ones bought and which ones cashed out.

  • Companies linked to David Tepper and Philippe Laffont held on to Nvidia, while others exited the stock.

Microsoft, Nvidia and Tesla were among the best-performing stock markets this year as investors bet the trio would be the big winners from the artificial intelligence revolution.

A review of the holdings of some of the world’s largest and most sophisticated investors by Markets Insider found that some managers are true advocates of the technology, while others were able to use the market’s giddiness to reap big profits.

The funds mentioned declined to comment or did not immediately respond to requests for comment.

Nvidia

The graphics chip maker has seen an explosion in demand from companies building all kinds of AI applications, from self-driving cars and humanoid robots to virtual chatbots. Its stock price is up about 230% this year, pushing its market cap to about $1.2 trillion, making it the best-performing S&P 500 of 2023 by a wide margin.

A whole series of top investors moved to Nvidia in the first half of this year. They included companies associated with Dan Loeb, Jim Simons, Paul Tudor Jones, Stanley Druckenmiller, Steve Cohen, David Tepper, Jeremy Grantham and George Soros.

For example, Tepper’s Appaloosa management went from zero Nvidia shares to 150,000 at the end of March, and more than 1 million shares worth more than $400 million at the end of June and September.

Simons’ Renaissance Technologies holdings rose from fewer than 4,000 shares at the end of March to 1.9 million three months later. As of September 30, it still owned 1.2 million Nvidia shares worth $526 million.

Philippe Laffont’s Coatue Management considered the chipmaker its largest public market position at the end of the third quarter, after the company increased its stake by more than a million shares in the past 12 months.

Glen Kacher’s Light Street had Nvidia as the largest position in its public portfolio at the end of September, after an initial investment in the fourth quarter of 2022. The stake has driven the company’s strong returns this year, a source close to the company told Business. Insider was at 34.1% for its long-short fund and 44.5% for its long-only offering.

In addition, Chase Coleman’s Tiger Global added more than a million Nvidia shares to its portfolio after not owning any 12 months earlier. Maverick, meanwhile, has increased its stake in Nvidia tenfold since the start of the third quarter of 2022.

Tudor Investment Corporation also expanded its position from fewer than 8,000 shares at the end of last year to 179,000 shares worth about $76 million at the end of June, ignoring options. However, in late September it reduced its holdings to fewer than 15,000 shares worth about $6 million.

Investors remained divided over Nvidia in the third quarter. The Bill & Melinda Gates Foundation Trust and Dalio’s Bridgewater Associates both established small stakes in Nvidia. However, “The Big Short” investor Michael Burry’s Scion Asset Management bought bearish put options on an index of microchip stocks that ranks Nvidia as the third-largest holding.

Lone Pine and Viking Global, a pair of Tiger Cubs from Connecticut, both bought Nvidia during the year and completely sold out. Lone Pine bought more than 600,000 shares in the first quarter but sold them in the second quarter, while Viking bought more than 300,000 shares in the second quarter only to sell them in the third quarter.

Tesla

Shares of Elon Musk’s electric vehicle company are up 106% this year. Musk has been touting Tesla’s AI prospects for some time, pointing to the company’s autonomous driving and humanoid robot projects, which could help explain the stock’s rise this year. Additionally, Tesla shares fell nearly 70% in 2022, giving them plenty of ground to make up.

Cohen and Soros’ funds eliminated significant positions in Tesla in the first quarter of this year, while Tepper’s company, ignoring options, bought 150,000 shares in the first quarter but sold them all in the following three months. Simons’ RenTech also went from owning 4 million shares in the first quarter to 717,000 shares at the end of September. As for Dan Sundheim’s D1 Capital, it sold its entire Tesla stake in the fourth quarter of last year.

Tesla has several long-term shareholders, including Ron Baron’s Baron Capital, Cathie Wood’s Ark Investment Management and Jennison Associates, a growth stock manager. But it remains one of the most shorted stocks on the market. Hedge funds tracked by Goldman Sachs had short positions worth nearly $19 billion as of Oct. 31, MarketWatch reported, citing a Goldman report.

Microsoft

The enterprise software giant’s shares fell nearly 30% in 2022 but have risen 55% this year to near-record highs, pushing its market value to about $2.8 trillion.

The buying frenzy was fueled in part by this spring’s reported $10 billion investment in Sam Altman’s OpenAI, the parent company of ChatGPT, the innovative chatbot that took the AI ​​hype mainstream.

Microsoft was already a big stock before this year, but several top investors have increased their exposure to it. Tepper’s Appaloosa increased its stake from 235,000 shares worth $56 million at the end of December to 1.6 million shares worth $516 million nine months later. Tudor Jones’ company also boosted its holdings, excluding options, from 7,300 shares to 193,000 shares over the same period.

Cohen’s Point72 also quadrupled its holdings to just over 2 million shares in the nine months to September, while Dalio’s Bridgewater grew its holdings from around 17,000 shares to more than 200,000 in the period.

Coatue van Laffont has increased his position at Microsoft almost tenfold in twelve months. Light Street and Tiger Global also increased their shares in Microsoft in the year to September 30.

Al Gore’s Generation Investment Management, Loeb’s Third Point and Druckenmiller’s Duquesne Family Office also increased their Microsoft holdings this year.

On the other hand, billionaire Lee Ainslie’s fund halved its Microsoft position in the year to September 30. Lone Pine and Viking also cut their Microsoft holdings by 36% and 14%, respectively, during the same period. London-based TCI sold its entire stake of more than 11 million shares in Microsoft in the third quarter.

Read the original article on Business Insider

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