Top U.S. hedge funds dialed back their positions in the Magnificent Seven during Q3 — marking a notable shift after last quarter’s bullish run fueled by AI enthusiasm.
🔍 Key Takeaways
- 📉 Reduced Big Tech Exposure:
- Nvidia: Bridgewater, Coatue, Tiger Global, Scion all trimmed stakes
- Meta: Lone Pine cut 34.8%, Tiger Global slashed 62.6%
- Alphabet: Bridgewater cut >50%
- 🛍 Shift Toward Application Software, E-Commerce & Payments
- New/increased positions in Adobe, Dynatrace, Etsy, Fiserv, Cigna, Elevance Health
- Discovery Capital initiated positions in Alphabet, Cleveland-Cliffs, and insurers
- 📈 Market Backdrop
- S&P 500 +8% in Q3
- Nasdaq 100 +9%
- Bond yields dipped ~7 bps as easing expectations rose
🏦 Spotlight on Funds
- Bridgewater:
- Cut Nvidia by ~⅔
- Expanded software/payments exposure
- Tiger Global:
- Reduced Meta by 62.6%
- Coatue:
- Reduced Nvidia by 14.1% amid broader AI repositioning
- Balyasny:
- Significantly increased Apple holdings
- Berkshire Hathaway:
- New $4.3B stake in Alphabet
- Further reduced Apple position
🧭 What It Signals
After a year of soaring AI valuations, hedge funds appear to be:
- Taking profits at peak levels
- Rotating into diversified software & payments plays
- Managing risk ahead of potential macro volatility
- Positioning for broad-based performance rather than mega-cap dominance
Q3’s 13F filings may be backward-looking — but they reveal a clear shift in institutional sentiment: AI leaders remain strong, but the era of concentrated mega-cap bets is moderating.