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Wall Street’s Whales Split on Major Tech Stocks in Q3
Recent regulatory disclosures reveal a significant divide among major investors regarding two of the biggest players in the tech sector, Alphabet and Amazon, during the third quarter of 2023. These filings, known as 13Fs, offer retrospective insights into the positions taken by acclaimed hedge fund managers and billionaire investors over the three months leading up to September 30.
Investor Moves in Alphabet
Alphabet Inc. (GOOGL), the parent company of Google, saw contrasting movements among prominent investors last quarter. Third Point, overseen by Dan Loeb, opted to liquidate its entire stake valued at approximately $333 million. Similarly, billionaire David Tepper’s Appaloosa Management disclosed a 2.2% reduction in its holdings of Alphabet shares.
Conversely, some firms demonstrated bullish sentiment toward Alphabet. Seth Klarman’s Baupost Group significantly increased its Alphabet investment by 37%, while Philippe Laffont’s Coatue Management added 4.6% more to its existing position. Notably, Bill Ackman’s Pershing Square maintained its investment in Alphabet without alterations during this period.
Amazon’s Mixed Reception
Amazon.com Inc. (AMZN) also experienced mixed trading activity among investors. Third Point reduced its Amazon stake by nearly 28%, although it remains one of the fund’s most significant assets, valued over $689 million. Meanwhile, D1 Capital, led by Daniel Sundheim, scaled back its Amazon shares by 6.2% but still retains a considerable share worth $225 million.
On the flip side, Coatue management took a more aggressive approach, increasing its Amazon holding by 4.6%, marking a substantial investment valued close to $2.1 billion.
Understanding the 13F Disclosures
While 13Fs provide a valuable glimpse into the trading strategies of prominent investors, they have limitations. These filings only show end-of-quarter snapshots without detailing specific trades. Therefore, the actual positions of funds might have fluctuated since the end of the reporting period. This is particularly relevant for hedge fund managers known for rapid trading, such as Tepper.
Additionally, these disclosures do not include information on short positions—investments aimed at profiting from a decline in a stock’s price—complicating the understanding of a fund’s complete market perspective.
Other Sector Movements
The third-quarter regulatory filings did not solely spotlight big tech stocks; several health-related companies emerged in the discussions as well. D1 Capital initiated a large position in GE Healthcare, valued at around $268 million, making it one of their largest holdings. Coatue also substantially increased its investment in Eli Lilly, signaling confidence in the healthcare sector. In contrast, Third Point reduced its stake in Danaher by 4.9%, reflecting broader shifts in investment strategies.
Final Thoughts
While the insights from these filings are informative, they should not dictate the basis for investment decisions. Following Jim Cramer’s philosophy of “buy and homework,” investors are encouraged to monitor these disclosures along with significant market news that may influence stock prices. As Cramer noted, a well-informed investor is more equipped to understand the value of their holdings over time.
Despite the mixed trading activities by prestigious investors, sentiments regarding Alphabet and Amazon remain bullish in the long term. Profit-taking from recent gains is a common strategy, and recognizing the value in these stocks may still hold true for many in the investment community.
Source
www.cnbc.com