Hedge funds adjust positions: Apple (AAPL.US) is still favored, Nvidia (NVDA.US) is sold off

As hedge funds continue to adjust their investment portfolios in the AI wave, they have been buying large tech stocks such as Apple (AAPL.US) in the second quarter while reducing their positions in Nvidia (NVDA.US).

According to analysis of 13F filings by media, Apple saw the largest increase in value during the three months ending June, with its stock price surging nearly 25% during the period, attracting net buying of over 8.5 million shares by hedge funds. Apple was added to portfolios by Janus Henderson Group Plc and Third Point LLC during the period.

The filings also showed hedge funds increased their exposure to other AI-related companies such as Amazon (AMZN.US) and TSMC (TSM.US). Meanwhile, hedge funds sold Nvidia shares during the second quarter, taking profits from the stock's recent surge. Microsoft (MSFT.US) was reduced or sold by 140 hedge funds.

Hedge funds' holdings changed as the S&P 500 rose 3.9% in the second quarter and 14% in the first half of 2024 on the back of economic recovery and strong corporate earnings. But since then, conditions have changed. In July, fund flows began to leave large-cap stocks and move into smaller, riskier sectors. And global markets suffered a large sell-off at the beginning of this month amid concerns about a slowdown in US economic growth and a bubble in AI.

To date, media has analyzed 13F filings from 674 hedge funds, which had total assets under management of $443.46bn at the end of the second quarter, down from $427.22bn at the end of the first quarter. The analysis showed that tech stocks were the most heavily weighted in hedge fund portfolios, at 27%, followed by non-discretionary consumer staples, at 16%. The largest decrease in investment was in the communications sector, while the largest increase was in the tech sector.