By Suzanne McGee and Akash Sriram
PROVIDENCE, Rhode Island, May 15 (Reuters) – Institutional investors took new positions in semiconductor stocks ranging from Intel to Micron during the first quarter of the year, positioning them to profit from a red-hot rally that extended into the second quarter, according to a Reuters overview of filings from some 6,600 hedge funds, pension funds, college funds and others with the U.S. Securities and Exchange Commission.
Nearly 5,000 of all those investors that had filed their quarterly 13-F filings by late afternoon Friday reported they were buyers of one or more of 17 semiconductor firms tracked by Reuters.
One of the most aggressively purchased chipmakers was Micron, whose stock has soared 154% so far this year as demand has boomed for memory chips amidst the AI buildout. A total of 2,440 institutions reported taking new positions in Micron, including Rockefeller Capital Management and Schroder Investment Management.
On Micron’s heels was Intel, a turnaround story whose stock has boomed 195% year to date. Tiger Global Management disclosed that it initiated a position in Intel in the first quarter, along with Neuberger Berman and MetLife Asset Management.
These filings with the SEC offer a glimpse into the portfolios of large institutional investors, from hedge funds to pension funds and endowments. Major institutional investors must report any changes made to their portfolio and its composition to the SEC within 45 days of the end of each calendar quarter. The data obtained by Reuters from the SEC’s database reflect those firms that had submitted their filings as of late afternoon on Friday. The data does not capture changes to their portfolios they may have made since March 31.
Northern Trust emerged as a big investor across the semiconductor space, initiating new positions in Intel and Micron as well as Seagate Technology and Western Digital during the first quarter. Those stocks have soared 188% and 179%, respectively, so far this year..
AI INFRASTRUCTURE
Institutions also were eager buyers of other stocks whose fate is closely linked to the rollout and adoption of AI during the first three months of the year. More than 4,000 of them added to their existing holdings or initiated new positions in a group of nine companies that are big players in the AI infrastructure arena, including Oracle, Arista Networks and Vertiv. Only 164 of the institutions reported selling space during the quarter.
Data center companies, a group whose fate is tied to AI’s insatiable demand for energy, also saw big buying interest on the part of institutional investors, as well as utilities, which will be generating much of that power. As of late Friday, 13-F filings show no institutions reduced or liquidated their exposure to utilities during the first quarter, while nearly 3,800 reported they added to or initiated new positions in that sector.
Meanwhile, the data appear to show that institutional investors are being more selective when it comes to the “Magnificent Seven” AI giants – a cohort that also includes Meta and Microsoft, amid ongoing uncertainty during the first quarter about whether they could sustain the pace of spending on AI and their growth. Sellers outnumbered buyers by a narrow margin during the period, according to the 13-F data.
Billionaire investor Bill Ackman’s Pershing Square hedge fund opened a new position in tech giant Microsoft after its stock price dropped recently, selling his long-term holding in Google parent Alphabet to help pay for it.
Among the 143 investors who initiated a position in Palantir, another high-profile technology player, was Mubadala Capital, the sovereign wealth fund of the UAE. It acquired a small position valued at $9.9 million during the first quarter, according to its filing.
Mubadala also initiated a position in Shopify, one of the software-as-a-service stocks slammed during the first quarter by fears that AI will disrupt their business models and derail their profitability. But for a group of 20 U.S.-listed stocks in that category, Reuters found that overall, institutions were more prone to sell than to buy amidst the carnage, with 397 liquidating one or more positions.
(Reporting by Suzanne McGee in Providence, Rhode Island; Additional reporting by Akash Sriram in Bengaluru; Editing by Daniel Wallis and Sanjeev Miglani)
Comments