Billionaire Paul Singer Exits Arm Holdings, Should You Follow Suit?

Billionaire investor Paul Singer's hedge fund, Elliott Management, has completely exited its position in Arm Holdings (ARM) and initiated a substantial new put option on Hewlett Packard Enterprise (HPE). Elliott Management also increased holdings in Phillips 66 (PSX) and other names. The move suggests a strategic realignment within Elliott's portfolio, but it's unclear whether it indicates diminished confidence in Arm's near-term trajectory or a reallocation towards sectors like enterprise IT.

Billionaire investor Paul Singer's hedge fund, Elliott Management, has made significant moves in its portfolio during the second quarter of 2025. The fund completely exited its position in Arm Holdings (ARM) and initiated a substantial new put option on Hewlett Packard Enterprise (HPE). Additionally, Elliott Management increased its holdings in Phillips 66 (PSX) and other names, suggesting a strategic realignment within the portfolio.

The exit from Arm Holdings is particularly notable as it follows a period of substantial growth and value appreciation for the semiconductor company. Arm, headquartered in Cambridge, UK, specializes in developing energy-efficient CPU cores, GPUs, NPUs, SoC infrastructure, and associated tooling. The company's market cap stands at approximately $141 billion, reflecting a significant increase from prior years [1]. Despite a recent dip in share price due to softer-than-expected guidance and strategic pivots, Arm's stock has shown resilience, with analysts predicting EPS to be around $0.89 for fiscal 2026, down 16% YoY, before improving by 68.5% annually to $1.50 in fiscal 2027 [1].

Elliott Management's new put option on Hewlett Packard Enterprise (HPE) suggests a bullish stance on the enterprise IT sector. HPE is positioned as a leader in the AI server market and is expected to benefit from ongoing digital transformation trends. The fund's increased holdings in Phillips 66 (PSX) indicate a continued focus on the energy sector, which has shown strong fundamentals despite market volatility.

The strategic realignment within Elliott Management's portfolio could indicate several factors. It could signal a diminished confidence in Arm's near-term trajectory due to recent challenges, or it could reflect a reallocation towards sectors like enterprise IT, which are poised for significant growth. The fund's actions are a reminder that portfolio management is a dynamic process, requiring continuous evaluation and adjustment based on market conditions and company-specific developments.

In conclusion, Elliott Management's recent moves highlight the importance of strategic portfolio management and the need to stay attuned to market trends and company-specific risks. Investors should closely monitor the developments in these sectors and the broader market to gauge the potential impact on their portfolios.

References:
[1] https://www.barchart.com/story/news/34284148/billionaire-paul-singer-just-sold-this-chip-stock-should-you
[2] https://paginasiete.bo/medtronic-plc-nyse-mdt-shares-drop-3-despite-board-changes-following-elliott-management-investment-mdt-stock-price/
[3] https://seekingalpha.com/news/4485792-elliott-management-takes-new-stake-in-hewlett-packard-exits-arm-among-q2-moves