Key Takeaways
- Berkshire Hathaway, Third Point, and other institutional investors will file 13F forms for the first quarter by Wednesday.
- Berkshire has already revealed that it trimmed its position in Apple and exited its position in Paramount as it works to build up its cash reserves.
- AI is once again a major trend to watch, as investors will keep an eye on changes to holdings in AI-focused tech firms, chipmakers, and other companies tied to the emerging technology.
- Nvidia will be another company to watch, as it will feature as an investment while also filing its own for its positions in stocks such as Arm and SoundHound.
If you look to the investment wisdom of major investors, such as Warren Buffett, Dan Loeb, and others, you will be keeping a close eye on 13F filings this week that will reveal how their equity positions changed from the beginning of the year to the end of March.
Most large investors with assets under management of $100 million or more are required to report their equity holdings each quarter via the SEC’s Form 13F. The deadline for these filings for the March quarter is May 15.
But remember, the 13F filings are only a snapshot of the portfolios at the end of the March quarter, and offer no insight into the price investments were made at or any profit or loss from their sale. They may also not be accurately representative of the portfolios today since trades after March will not be accounted for in these filings.
More Changes For Buffett After Apple, Paramount?
At the recent Berkshire Hathaway (BRK.A, BRK.B) annual shareholders meeting. Warren Buffett revealed two changes to the company’s portfolio, and investors will be keen to know if there were more. The will be especially eager to know any details around the mystery stock investment that it has kept a lid on for almost two filing cycles.
The company pared its stake in Apple (AAPL) for a second quarter in a row, though it remains Berkshire’s largest stock holding. According to Berkshire filings, its Apple position was worth $135.4 billion at the end of the first quarter, compared with $174.3 billion at the end of 2023. That’s a roughly 22% decline in value, when Apple’s price dropped only about 11% at the end of March, compared to the last trading day of December.
The sale was linked to Buffett’s desire to add the the company’s already massive cash reserve of $189 billion, which he predicts will rise to over $200 billion by the end of the second quarter. Investors may want to keep an eye on whether Buffett sold shares of any other companies last quarter to add to the cash pile.
But there was one investment that didn’t quite work out for Berkshire, a rare mistake from Buffett. He admitted during the annual meeting that Berkshire sold its entire position in Paramount Global (PARA) at a big loss. The company had bought Paramount shares in the first quarter of 2022 and at the end of last year, it held 63.3 million shares.
Loeb’s Learning To Love Alphabet Again On AI Potential
Dan Loeb’s Third Point Capital sold its entire Alphabet stake (GOOG) (GOOGL) in the fourth quarter of 2023. But, it looks like Loeb’s changed his mind.
Third Point made a “substantial investment” in Alphabet during the first three months of the year, Loeb said in a recent investor letter, adding that any artificial intelligence-related benefits to the company could outweigh any risks AI poses to its core business.
Alphabet “has both a substantial distribution and technology advantage over competitors and is positioned to use its AI capabilities to unify, enhance, and better monetize the entire suite of its products,” Loeb wrote.
Of course, investors will want to know how large Loeb’s renewed position in Alphabet is, but will also be looking for details around other AI-related investments that now comprise of about half of his entire portfolio.
Third Point upped its holding of Taiwan Semiconductor Manufacturing Co. (TSM) and Loeb pointed specifically to legacy tech companies like Microsoft (MSFT) and Amazon (AMZN) as key players in the AI race, perhaps signaling that those are companies to watch for in the upcoming 13F filing. The fund had sold shares in all three companies in the fourth quarter.
Nvidia: An Investment and An Investor
No conversation around AI-related equity investments can be complete without mentioning Nvidia (NVDA). But prominent investors have extremely divergent views on investing in the tech giant that provides hardware for AI platforms.
Buffett, for example, didn’t own any shares of Nvidia as of December and given the views on AI he expressed at the annual meeting, chances are that stance hasn’t changed much.
But Ray Dalio‘s Bridewater Associates bought a massive stake in Nvidia at the end of last year, increasing its holding nearly six-fold. Investors would want to know if the fund continues to remain bullish on the chipmaker, or has its view changed like that of Stanley Druckemiller.
Druckenmiller’s Duquesne Family Office sold Nvidia shares after they more than tripled in 2023, he told CNBC, adding that the AI trend is “a little overhyped now, but underhyped long term.”
But Nvidia’s not just an investment, it filed its first 13-F last quarter to reveal companies it had invested in.
As of December, Nvidia had positions in AI-focused firms including Arm (ARM), SoundHound AI (SOUN), Nanox Imaging (NNOX), and Recursion Pharmaceuticals (RXRX). Several of the stocks included in the 13F experienced an increase in share price after the disclosure.
Given Nvidia’s prominent position in AI, it’s likely that shifts in its holdings revealed in its upcoming 13F filing could prompt additional market movement for those companies.