May 15th was an important day in the US capital market. It was the last date on which American investment houses, managing at least $100 million, were required to submit to the US Securities and Exchange Commission (SEC) a document describing their investments in the quarter that ended at the end of March.
The document, 13F, is the list of actions in securities carried out by the heads of the investment houses. And it also provides the way to peek behind the backs of the biggest investors on Wall Street to know what they bought or sold last quarter.
The seven “wonderful” stocks are the ones that pushed the Wall Street indices to record highs, it makes sense that we would be curious to see what the investors in these stocks did in the first quarter. It turns out that they see things a little differently from each other.
1 Trim Nvidia
After the amazing reports that Nvidia published last night, it’s possible that some of them, at least, regret the cut in the stock.
But it seems that in the first quarter they did not want to take part in the artificial intelligence hit. Among the eight sellers are: Ken Griffin of Citadel Advisors, who sold 2.4 million shares, Israel Englander of Millennium Management, who sold 720,000 shares, Stanley Druckenmiller, who sold 440,000 shares, and David Siegel and John Overdeck of Two Sigma Investments, who sold 420,000.
Why would they sell the hottest stock? Aside from taking profits, there are some red flags that billionaires notice. The growing competition from other companies such as Microsoft, Meta or Amazon which are also the biggest customers of Nvidia and make up about 40% of its revenues. Each of these is working on its own AI chips, so some say that the demand for Nvidia chips has reached its peak.
● Two giants, a business model that stands to the test and imaginative abilities: the AI race is at a boiling point
2Meta is shown the door
Nine billionaires, or even ten if you count the late Jim Simmons of the Renaissance, sold their stock Meta , the controlling owner of Facebook. Among them, Ole Andreas of Viking Global Investors who sold 2.6 million shares, Philippe Lafont of Coatue Management who sold 1.3 million shares, Ken Griffin of Citadel Advisors who sold 1.15 million shares and Stephen Cohen of Point72 Asset Management who sold 780 million shares.
The main reason for the sale is probably profit realization, since the bottom reached in 2022, the meta peak 500%. And maybe the investors are also disappointed with Meta’s capital investments. The company’s stock fell after in 2022 Mark Zuckerberg decided to invest the company’s capital in Metaverse and augmented reality, now the company is diverting its resources to artificial intelligence, and investors are not sure that the company’s investments will achieve the appropriate return.
3Don’t stop buying Amazon
One of the seven amazing companies that billionaires keep buying is Amazon . Nine billionaires bought many shares of the company, among them, Israel Englander of Millennium Management with 2.4 million shares, Ole Andreas of Viking Global Investors with 1.9 million, Chase Coleman of Tiger Global Management, 1.4 million, Jeff Yass of Susquehanna International, 1.3 million and Ray Dalio of Bridgewater Associates, 1 million shares.
Amazon is the largest online retailer in the world, but the company also has other growth engines that catch the eyes of investors – Amazon’s cloud business generates revenues of about 100 billion dollars a year, what’s more, the profit margins in them are extremely high. The company’s advertising and subscription services stand on their own, 2 million people come to Amazon’s website every month and the company has 200 million subscribers to the Prime streaming service.
The billionaires also notice the company’s cash flow multiplier, after it stood at 23-37 for many years, now it stands at only 12.4 according to the forecast for 2025.
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