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What We Learned From Q1 Bets Of Prominent Investors

Key Takeaways

  • 13-F filings for the first quarter of 2024 reveal that big-name investors continued to focus on artificial intelligence, though many turned to companies other than Nvidia.
  • Some prominent investors took on new stakes—or added to existing positions—in Chinese retail and tech companies in the midst of speculation that the country’s economy will slow in 2024.
  • Warren Buffett’s secret stock, accumulated confidentially in the last several quarters, was revealed to be insurance firm Chubb.
  • Some investors took contrarian or surprising positions, including in beleaguered aircraft maker Boeing and in physical gold.

A shift to big-name tech instead of pure play AI names, increased attention to Chinese firms, and the identity of Warren Buffett’s “mystery stock” were all notable reveals from the latest set of 13-F forms filed by major investors this week for the first quarter of the year.

Though 13-Fs are backward-looking and thus provide information that may be outdated, investors still pore over them for a sense of general investing trends among the biggest names in the field. Below, we explore some of the important takeaways from the batch of first-quarter 13-Fs.

Non-Nvidia Tech Bets For AI Play

Chipmaker Nvidia (NVDA) has long been seen as the dominating force in AI for the central role its hardware has played in enabling other firms to explore and integrate this emergent technology. The hype surrounding Nvidia has prompted shares to more than triple in the last year, making it one of the few companies with a market capitalization over two trillion dollars.

But many top investors focused their attention on other AI plays in the first quarter, perhaps signaling a new phase in the growing AI industry. Stanley Druckenmiller, for example, trimmed his Nvidia stake, calling AI “over-hyped” in the short term.

After its initial fumble with the release of generative AI platform Bard, Alphabet (GOOGL) seems to have emerged as a key AI pick for many prominent investors. Dan Loeb’s Third Point entered a new position in Alphabet after selling off its entire stake in the last quarter of 2023, for example, while Bridgewater Associates more than doubled its position by adding about 3.3 million shares. Bridgewater also added to its stakes in Nvidia and AMD (AMD).

Some investors turned to other stocks poised to benefit from the AI revolution. Druckenmiller opened positions in Apple (AAPL) and Meta Platforms (META) and added to existing stakes in Microsoft (MSFT), Palo Alto Networks (PANW), and similar firms. Seth Klarman’s Baupost Group entered a 1.1-million-share position in AI voice company SoundHound AI (SOUN).

Chinese Companies In Focus

Fears of a slowdown in China have resulted in a rough couple of years for the Chinese stock markets. The tempered valuations provided an opportunity for some prominent investors to bet on Chinese retail and tech companies.

David Tepper’s Appaloosa Management more than doubled its positions in Alibaba (BABA), Baidu (BIDU), and online agriculture retailer PDD Holdings (PDD). The firm also took a new 3.6-million-share position in e-commerce company (JD).

Contrarian value investor Michael Burry also added to his stakes in and Alibaba in the first quarter. Burry took on a small stake of 40,000 shares of Baidu during that period as well.

Buffett’s Secret Stock No Longer A Secret

Buffett’s Berkshire Hathaway (BRK.A) (BRK.B) revealed that the mystery position it has kept confidential for multiple quarters is Chubb Ltd. (CB), the Swiss-incorporated insurance firm. Berkshire ended the first quarter with nearly 26 million shares of the company.

Berkshire’s investment in Chubb is the latest addition to its substantial and wide-ranging insurance portfolio. One of the company’s crown jewel businesses is GEICO, and it also operates General Re and a number of other life and home insurance services. Buffett even acquired property and casualty reinsurance firm Alleghany for $11.6 billion in 2022.

Some Unusual Bets

As always, some 13-Fs revealed unusual or surprising bets, which are notable for standing out from the crowd but which may not inspire retail investor decisions.

One unusual play in the first quarter was Tepper’s decision to take a new position in Boeing (BA) despite all of the turmoil surrounding the company over a whistleblower scandal and concerns about the safety of its aircraft. Appaloosa ended the quarter with 225,000 shares of the aircraft maker.

Another surprising bet was Burry’s massive position in gold, typically seen as a hedge against stocks. Interestingly, Burry also added to his position in Block (SQ) as the fintech firm recently doubled down on its bitcoin investments.

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