Berkshire, Bridgewater and Tiger expand positions in chip stocks

Despite the downturn, hedge funds like Berkshire, Bridgewater and Tiger have bought into tech stocks including Netflix, Microsoft and Nvidia, according to the latest round of 13F filings for Q3, with tech and semiconductor stocks amongst the hottest tickets. However, Tesla and banking shares were pared back for Coatue and Berkshire.

• Major hedge fund managers expand positions in chip stocks
• Netflix back in fashion with Maverick Capital
• Despite investor confidence in sector, the ProShares Ultra Semiconductors ETF down 60% YTD

The latest 13F filings from major investment firms including Berkshire Hathaway, Bridgewater, Tiger Global, Maverick, Coatue Management and Icahn Enterprises have revealed bullish sentiment towards tech stocks amid the downturn.

A 13F filing is a report filed every quarter by investment funds to the US Securities and Exchange Commission (SEC), which reveals their US stock holdings. This time around there was a heavy weighting for tech stocks, with funds particularly buying into chip companies.

Berkshire Hathaway, Warren Buffett’s fund, bought into semiconductor company Taiwan Semiconductor Manufacturing Company (TSMC) [TSM], revealing a position of 60 million American depository receipts (ADRs). It also boosted its stake in petrol company Occidental to 194 million shares, bringing it to a 30% share in the company.

Coatue Management run by Philippe Laffont cut its stake in Tesla by 16% – still its biggest holding – but raised its stocks in chipmaking giant Nvidia by 34%.

Icahn Enterprises, run by Carl Icahn, bought into Crown Holdings, a manufacturer of beverage cans. It also increased its Twitter [TWTR] stake to 12.5 million shares, which was famously taken private by its new owner Elon Musk at the end of the third quarter.

Hedge funds pick up cheap tech stocks

Tech stocks were a major theme for the regulatory filings this time round. Tech-focused fund Tiger Global, run by Chase Coleman, bought into names including Microsoft [MSFT], Block [SQ] and Uber [UBER] in Q3.

Bridgewater, managed by Ray Dalio, also bought into tech stocks, including Microsoft and Alphabet [GOOGL]. It also snapped up shares in Visa [V] and snack company Mondelez [MDLZ].

Hedge fund Maverick Capital, run by Lee Ainslie, revealed new additions including Netflix [NFLX], which it had previously sold off. It increased its position in Meta Platforms [META], the parent-company of Facebook, by 25% to $122.3m.

Maverick channelled a $82.9m investment into Netflix stock during the third quarter, the 13F filings showed. Owner Ainslie had owned the streaming stock earlier in 2022, but during the second quarter liquidated his position. Netflix stock has had a rough time lately, with shares down by almost half year-to-date, amidst the wider selloff of tech names. Maverick’s investment may catalyse renewed faith in Netflix shares.

Semiconductors in focus

Despite a loss of confidence in the tech sector over the past year, Tiger Global upped its stake in Microsoft by 16.4%, making it the fund’s largest investment after JD.com [JD]. It added 9.3 million new shares in ridesharing app Uber, worth approximately $272m.

Bridgewater, meanwhile, upped its stake in Microsoft from 124,000 to 319,000 shares, and boosted its Alphabet holdings to an enormous 1.46m shares from the previous 49,000.

Outside of tech, semiconductors were a draw for fund managers. The filings showed hedge fund Coatue added significantly to its Nvidia [NVDA] stake, now its fifth-largest position. While the Nvidia share price is down 47.6% year-to-date, the chipmaker’s stock has recovered by 14.2% since the start of November, helped by its recent Q3 earnings, in which it beat analysts’ expectations.

Coatue also increased its stakes in semiconductor companies, including Advanced Micro Devices [AMD] and NXP Semiconductors [NXPI].

Berkshire Hathaway, meanwhile, made headlines by hugely upping its stakes in Apple's key chipmaker TSMC to the tune of $4.1bn; the company now sits in the conglomerate’s top 10 holdings.

Fund focus: SPDR S&P 500 ETF

Microsoft is a holding in 437 ETFs, according to ETF.com. The biggest fund with the tech company’s shares is the SPDR S&P 500 ETF Trust [SPY], with approximately 80.9 million shares. The fund is down 15.65% year-to-date, but up 6.7% over the past month. As of 18 November, Microsoft has a weighting of 5.39% in the fund and is the second-largest stock in its portfolio after Apple [APPL].

Netflix is held in 251 funds, with a total of 37m shares in being publicly traded. The fund that has the greatest allocation towards Netflix stock is the First Trust S-Network Streaming & Gaming ETF [BNGE]. Netflix has a weighting of 5.05%, making it the fourth-largest in the fund as of 18 November. The fund’s top holding is Nvidia with a weighting of 5.25%. BNGE is down 28.5% since it launched on 25 January this year, but is up 6.7% in the past month.

Nvidia has the most exposure in the Proshare Ultra Semiconductors ETF [USD], where it has a weighting of 18.05% and is the fourth-largest holding as of 18 November. The fund is down 63.7% in the year-to-date, but has climbed back 45.4% in the past month.