Investors Expand Bets on Tech Stocks as Sector Still Fuels Market Gains -Filings
Several hedge funds expanded their bets on big technology stocks including Amazon, Microsoft and Meta Platforms even as these companies stumbled some during the third quarter after having fueled broad market gains this year, new regulatory filings show.
Tiger Global Management, a widely watched fund in the investment world, increased its holding of Nvidia, whose semiconductors back artificial-intelligence systems, by 77% during the third quarter. It boosted its bet on Alphabet by 40%, the filings show.
The firm also raised its Meta investment by 4%, boosted its bet on Microsoft by 8% and increased its Amazon stake by 6.5%.
Tiger Global and other hedge funds nursed heavy losses in 2022 when technology stocks skidded lower. But many fund managers put more money to work in the sector this year when seven big tech stocks raced higher, playing a critical role in helping the broader stock market recover after last year’s drop.
Bill Ackman, whose Pershing Square Capital Management is widely followed for investment clues, reported raising his stake in Alphabet Inc. Class A shares by nearly 100% to own 4.4 million shares at the end of the quarter.
Daniel Loeb’s Third Point said in a filing that it made a new bet on Meta, owning 1.1 million shares at the end of the quarter.
Coatue Management, founded by Philippe Laffont, increased its position in Meta by 9% to own 6.2 million shares on September 30, the filings show.
Glen Kacher’s Light Street Capital increased its position in Amazon by 5% after having reported a new position in the online retailer in the second quarter.
Ratan Capital Management reported even bigger increases, saying it increased its Amazon holding by 72% and boosted its Meta stake by 67%. The fund also reported a new position in Alphabet, saying it owned 20,000 shares on September 30.
“We’re happy to see both headline and core CPI come in lower than expected. It’s telling us that the Fed is done, there’s nothing left for it to do here,” said Thomas Hayes, chairman at hedge fund Great Hill Capital at New York.
“This is what the Fed was looking for, slowing inflation, slowing labor market and the economy’s holding up at the same time.”
Following the data, traders erased bets the Fed will raise borrowing costs any further and piled into bets on rate cuts starting by May.
U.S. Treasury yields dropped, with the two-year yield, which best reflects short-term interest rate expectations, sliding to two-week lows. [US/]
That in turn lifted megacap-growth stocks such as Nvidia, Alphabet, Amazon.com and Tesla up between 1.7% and 5% in early trading.
The small-cap Russell 2000 index jumped 3.3%.
Wall Street’s main indexes have seen a strong rebound in November on expectations that U.S. interest rates were near their peak, even as Fed Chair Jerome Powell last week left the door open to further tightening.
Fed Vice Chair for Supervision Michael Barr is set to testify before the Senate Banking Committee, while investors will parse comments from Cleveland Fed President Loretta Mester and Chicago Fed chief Austan Goolsbee later in the day.
Focus is also on negotiations by U.S. lawmakers over a funding bill, as lawmakers face an end-of-week deadline to fund the federal government.
U.S. House of Representatives Speaker Mike Johnson said on Tuesday he thinks the House will pass a short-term spending bill to avert a partial government shutdown beginning on Saturday.
At 9:36 a.m. ET, the Dow Jones Industrial Average was up 330.19 points, or 0.96%, at 34,668.06, the S&P 500 was up 60.77 points, or 1.38%, at 4,472.32, and the Nasdaq Composite was up 256.49 points, or 1.86%, at 14,024.23.
Snap Inc shares jumped 9.2% following news that Amazon.com will allow Snapchat users in the United States to buy some products listed on the ecommerce company directly from the social media app.
Home Depot gained 5.3% after the U.S. home improvement chain beat quarterly profit estimates.
Fisker slid 17.3% after the electric-vehicle startup slashed its 2023 production forecast.
Advancing issues outnumbered decliners by a 13.89-to-1 ratio on the NYSE and by a 5.44-to-1 ratio on the Nasdaq.
The S&P index recorded 31 new 52-week highs and no new lows, while the Nasdaq recorded 59 new highs and 45 new lows.
While the CPI reading was likely the biggest concern, O’Rourke said that investors were also still digesting Moody’s weaker U.S. credit outlook issued after market close on Friday.