Stocks to sell

3 Popular Tech Stocks The Smart Money Is Dumping Now

Technology sector stocks are the driving force behind today’s bull market. The S&P 500 has been up 45% since the beginning of 2023 and 26% higher in the last 12 months. The tech sector is up 46% in the past year and has tripled in value in the previous five years.

The Magnificent Seven stocks drove last year’s gains, and many are reprising their role this year in driving the benchmark index higher. Although many tech stocks still have plenty of wind in their sales, some leading names have their stocks sold off by major hedge funds.

After a big run-up, the smart money is finding plenty of tech stocks to sell down. Below are some of the biggest tech names Wall Street is dumping.

Nvidia (NVDA)

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As the face of the tech sector charges higher, finding Nvidia (NASDAQ:NVDA) on the list may not be surprising. Locking in the tremendous profits money managers have made is the prudent thing to do to bolster their hedge funds’ returns. Of course, they may be leaving money on the table, too.

Ken Griffin’s Citadel Advisors is one of the biggest hedge funds, shedding the largest percentage of stock from its portfolio. In the first quarter, Griffin sold 24.6 million shares. NVDA stock ranged between $49.50 and $90.40 during the period for an average price of around $70 per share. Considering Griffin had an average buy price of over $34 a stub, he doubled his money.

The big sale, though, reduced his portfolio’s holdings in the artificial intelligence chipmaker’s stock by more than 67%. He now owns 11.2 million shares, still worth a princely $1 billion.

With Nvidia stock trading at lofty valuations, it may have been a smart move, but it is hard to see the chipmaker slow down anytime soon. Indeed, NVDA stock is up over 440% year-to-date.

Apple (AAPL)

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Arguably, Warren Buffett is the biggest surprise seller of Apple (NASDAQ:AAPL) stock. After selling off 10 million shares in the fourth quarter, the Oracle of Omaha dumped another 116 million shares in the first quarter from Berkshire Hathaway (NYSE:BRK-A, BRK-B). That was equal to almost 13% of his stake in the tech giant and reduced Apple’s position in the portfolio from nearly half the total to 44%.

That is still Berkshire Hathaway’s largest position. The next closest stock is Bank of America (NYSE:BAC), which accounts for 00% of the portfolio. Many investors wonder whether Buffett will continue to pare down the iPhone maker in the second quarter.

There’s no questioning his love affair with Apple. Part of the reason Buffett gave at Buffettpalooza, otherwise known as the annual shareholder meeting, for selling Apple was for tax purposes. It is also not the first (or second) time he has sold the stock for that reason. Typically, he has bought more shares afterward.

With Apple fully embracing artificial intelligence and integrating it into its iOS and consumer electronic products, there could be a new upgrade cycle in the iPhone and Macbook on the horizon. It could spur the stock price to continue growing. AAPL stock is up 19% in 2024, which could be a low point when investors look back in a year.

Microsoft (MSFT)

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Trading firm Jane Street Group had the biggest case of don’t-want-itis of Microsoft (NASDAQ:MSFT) stock. It sold off more than three-quarters of its position as the software and AI leader.

The hedge fund owned 6.6 million shares at the end of 2023 but three months later reduced its holdings to just 1.5 million, a 77% reduction. But Israel Englander of Millennium Management also sold off almost half his stake or some 238 million shares. However, he still owns almost $1.2 billion of Microsoft stock, nearly twice as much as Jane Street.

It is hard to argue with so many of these sales. Microsoft stock gained 82% in the first quarter, but it is up 24% year to date. This means there was a lot of sideways trading on the stock for much of the second quarter. Even so, the hedge funds lost out on another 42% of gains in the preceding three-month period. And Microsoft might not be done.

The integration of AI throughout its suite of products and services, especially in the Azure cloud services business, is sparking renewed fervor for what many smart money investors consider a tech stock to sell. Azure still trails behind Amazon’s (NASDAQ:AMZN) AWS and Alphabet’s (NASDAQ:GOOG, GOOGL) Google Cloud, but it is the fastest-growing of the three.

On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.

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