Several of Wall Street’s largest hedge funds reduced their exposure to the so-called “Magnificent Seven” stocks in the third quarter of 2025, including Nvidia, Amazon, Alphabet, and Meta, according to the latest SEC disclosures. At the same time, these funds increased positions in sectors such as application software, e-commerce, and payment processing, signaling a shift in portfolio strategies amid market uncertainties.

Bridgewater Associates Reduces Big Tech, Shifts to Software and Payments

Bridgewater Associates, known for outperforming peers in the first nine months of the year, cut its stake in Nvidia by nearly two-thirds to 2.5 million shares and trimmed Alphabet holdings by over 50% to 2.65 million shares. The firm also reduced its Amazon stake by 9.6% to around 1.1 million shares, along with a 27% reduction in Broadcom positions.

Simultaneously, Bridgewater increased exposure to sectors like application software and payments, acquiring shares in companies such as Adobe (ADBE.O), Dynatrace (DT.N), and Etsy (ETSY.N). In a note to investors, Bridgewater’s CIOs—Karen Karniol-Tambour, Greg Jensen, and Bob Prince—cautioned about growing risks to market stability. The firm currently manages $92.1 billion in assets.

Discovery Capital Expands in Latin America and Health

Discovery Capital, founded by Rob Citrone, initiated new positions in Alphabet, Cleveland-Cliffs (CLF.N), and health insurers like Cigna (CI.N) and Elevance Health (ELV.N). The fund also increased exposure to Latin America, while reducing holdings in certain exploration and production companies in the U.S. energy sector, including EQT, Antero Resources, and Range Resources, replacing them with a stake in Baker Hughes (BKR.O).

Additionally, Discovery doubled down on critical minerals producer Ramaco Resources (METC.O). Citrone trimmed his stake in America Movil (AMXB.MX) by 11.5%, maintaining a position valued at approximately $98.3 million.

Balyasny Asset Management and Tiger Global Adjust Portfolios

Balyasny Asset Management, led by Dmitry Balyasny, increased its stake in Apple (AAPL.O) even as peers, including Berkshire Hathaway, reduced exposure to the tech giant. Conversely, the fund slashed Amazon holdings by roughly 41% and expanded positions in insurers AIG and Allstate, as well as taking a new position in American Tower (AMT.N).

Tiger Global Management, founded by Chase Coleman, reduced its stake in Meta Platforms (META.O) to 2.8 million shares, valued at about $2.1 billion, and exited positions in companies including Eli Lilly (LLY.N), Novo Nordisk (NOVOb.CO), and CrowdStrike (CRWD.O). However, the fund added positions in Netflix (NFLX.O) and Klarna (KLAR.N), highlighting a tilt toward streaming and fintech opportunities.

Coatue Management Reduces AI and Big Tech Exposure

Billionaire Philippe Laffont’s Coatue Management reduced holdings in Nvidia by 14.1% to 9.9 million shares and trimmed exposure to Tesla, Amazon, CoreWeave, and Arm Holdings by double-digit percentages, while exiting stakes in Eli Lilly and Philip Morris (PM.N).

Despite reductions in certain tech positions, Coatue increased stakes in Microsoft (MSFT.O), Meta, and Alibaba, signaling a selective approach to Big Tech and e-commerce while mitigating risks associated with high-flying AI stocks.

Hedge Fund Trends and Market Implications

Overall, Q3 2025 saw hedge funds trim megacap tech positions while strategically increasing exposure to software, payments, e-commerce, and critical minerals, reflecting concerns over market volatility, AI-driven valuation risks, and sector rotation. Analysts suggest that such moves indicate a broader shift from concentrated tech bets toward diversified, growth-oriented sectors.