Ken Griffin's Citadel Splurges $4B on Amazon, Alphabet, and Nvidia in Q4; Trims Stakes in Meta, Microsoft

Billionaire investor Ken Griffin runs one of the most successful hedge funds in the world. As the founder and CEO of Citadel, Griffin has amassed a net worth of $49.9 billion, according to the Forbes Real Time Billionaires list.

Griffin's open-mindedness to various asset classes and love for math, which is evident from his quantitative investing approach, have helped Citadel generate over $74 billion in net gains since its inception in 1990.

Although Griffin could be more vocal about his investment strategies, his approach reveals patterns of high-frequency trades backed by complex algorithms, which he also uses to manage risks associated with these trades.

With a tech-heavy portfolio worth over $665.8 billion, Citadel has consistently outperformed the S&P 500 index. Griffin manages his extensively diversified portfolio of over 15,000 holdings by working with investment professionals and industry experts. He employs a market-neutral approach to balance his bullish trades with bearish ones to generate results uncorrelated to markets.

Griffin's Major Mag 7 Reshuffle

In Q4, Griffin's Citadel Advisors increased its stake in Amazon by 336% or 10.9 million shares in a trade worth over $2.2 billion. The hedge fund also boosted its Nvidia holdings by 119% or 11.74 million shares for $2.2 billion as well.

Citadel's also bumped its stake in Alphabet shares by 55% or 1 million shares in Q4. Other major buys include 5.8 million shares of Netflix, 2.8 million shares of Palantir Technologies, 6.5 million shares of Cognizant Technology, 1.9 million shares of Broadcom, 1.7 million shares of Oracle, 1.5 million shares of Visa, 599,910 shares of Apple, 2.4 million shares of Taiwan Semiconductor Manufacturing, and even 2 million shares of UnitedHealth Group.

However, the hedge fund cut its stake in Meta Platforms by 59% or 1.16 million shares in Q4. It also trimmed its Microsoft holdings by 17.7% or 704,460 shares in the latest quarter.

Headwinds for Microsoft, Meta Platforms

Investors are offloading Microsoft shares despite a massive quarterly earnings beat amid concerns of growing AI capex forecasts without comparable output or profitable product adoption. Investors are rotating away from AI infrastructure plays towards firms showcasing real AI product monetisation. Meanwhile, Wall Street continues to demand proof that major AI spending is driving sustainable margins rather than simply revenue growth.

Meanwhile, Needham analyst Laura Martin recently believes that the Meta stock is 'priced for perfection' but could tank by 15% if it misses growth targets. Meta continues to face headwinds from rising AI capex and multiple lawsuits related to patent infringement and the safety of minors on its platforms. Solos Technology filed a patent infringement case that targets Meta and major eyewear partners. Solos is seeking billions of dollars in damages and potential injunctions on smart eyewear products. Separately, Meta is also preparing for a trial in New Mexico over allegations related to child exploitation and failures to safeguard minors on its platforms.

The Meta stock has declined by over 14% over the past six months, while Microsoft shares slipped by more than 21% in the same duration.

Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.