TLDR:
- Billionaire Ken Griffin’s Citadel Advisors significantly increased its stake in Apple by 93.3% in Q2 2024
- Griffin sold 79% of Citadel’s stake in AI leader Nvidia
- Citadel instead invested heavily in Palantir Technologies, Pinterest, and Broadcom
- Apple plans to launch “Apple Intelligence” generative AI features in late 2024
- Analysts predict a potential iPhone upgrade supercycle driven by new AI capabilities
Hedge fund billionaire Ken Griffin’s Citadel Advisors made significant changes to its technology portfolio in the second quarter of 2024, according to recent regulatory filings.
The firm nearly doubled its stake in Apple while dramatically reducing its position in artificial intelligence (AI) leader Nvidia. At the same time, Citadel increased its investments in other high-growth tech companies like Palantir, Pinterest, and Broadcom.
Citadel’s 13F filing reveals that the hedge fund increased its Apple holdings by 93.3% in Q2, adding 2.64 million shares. This move brings Apple to Citadel’s fourth-largest overall position and second-largest individual stock holding.
The increased stake in Apple comes as the tech giant prepares to launch its first generative AI features, branded as “Apple Intelligence,” later this year.
Industry analysts suggest that Apple’s upcoming AI capabilities could drive a new iPhone upgrade cycle. The initial release of Apple Intelligence will only be compatible with iPhone 15 Pro models and newer devices, potentially motivating users to trade in older iPhones.
Given that iPhone sales account for nearly 46% of Apple’s total net sales, a successful upgrade cycle could significantly boost the company’s revenue and profits.
While doubling down on Apple, Citadel sold off 79% of its stake in Nvidia, the current darling of the AI boom. The hedge fund unloaded over 9.2 million Nvidia shares during the quarter. This move may reflect concerns about Nvidia’s sky-high valuation and the potential for increased competition in the AI chip market.
As Citadel reduced its Nvidia position, it increased investments in other tech companies with AI exposure. The hedge fund purchased over 5.2 million shares of data analytics firm Palantir Technologies, growing its stake by 1,140%. Palantir’s AI-powered platforms serve both government and commercial clients, with its enterprise-focused Foundry product showing particular promise for future growth.
Citadel also added 4.47 million shares of social media platform Pinterest to its portfolio. Pinterest’s user base continues to expand, reaching 522 million monthly active users in Q2 2024.
The company’s unique position as a visual discovery platform makes it attractive to advertisers and potentially valuable for AI-driven marketing initiatives.
Another beneficiary of Citadel’s tech reshuffling was Broadcom, with the hedge fund increasing its stake by 64%. Broadcom provides AI networking solutions for data centers and has diversified revenue streams in 5G wireless, automotive technology, and cloud computing.
Griffin’s investment decisions come at a time of both excitement and caution surrounding AI technologies. While companies like Nvidia have seen astronomical growth, there are concerns about potential market bubbles and unrealistic expectations.
Citadel’s moves suggest a strategy of maintaining exposure to AI trends while diversifying risk across multiple companies and sectors.
