Wall Street’s largest hedge funds significantly reduced their exposure to the so-called “Magnificent Seven” stocks during the third quarter of 2025. Key technology names affected include Nvidia (NVDA.O), Amazon (AMZN.O), Alphabet (GOOGL.O), and Meta (META.O), according to the latest SEC 13-F filings. Meanwhile, several funds increased positions in application software, e-commerce, and payments sectors, reflecting a strategic shift amid declining valuations in high-growth tech stocks.

Shift from Big Tech to Software and Payments

During Q3, Bridgewater Associates, which had a stellar performance in the first nine months of the year, slashed its Nvidia holdings by nearly two-thirds to 2.5 million shares and trimmed its Alphabet stake by more than 50% to 2.65 million shares. The fund also reduced exposure to Amazon and Broadcom, while boosting positions in software and payment companies such as Adobe (ADBE.O), Dynatrace (DT.N), and Etsy (ETSY.N).

Bridgewater’s portfolio adjustments were part of a broader rotation away from high-flying AI and tech names, as investors reassessed valuations that soared earlier in the year.

Other Hedge Fund Moves

• Discovery Capital, founded by Rob Citrone, initiated new positions in Alphabet, Cleveland-Cliffs (CLF.N), and health insurers Cigna (CI.N) and Elevance Health (ELV.N). Discovery also expanded its Latin America exposure while trimming stakes in U.S. energy exploration and production companies, such as EQT, Antero Resources, and Range Resources, replacing them with a stake in Baker Hughes (BKR.O).
• Balyasny Asset Management, led by Dmitry Balyasny, increased its stake several-fold in Apple (AAPL.O), even as other funds, including Berkshire Hathaway, reduced Apple holdings. Balyasny also boosted positions in insurers AIG and Allstate, and established a new position in American Tower (AMT.N).
• Coatue Management, managed by billionaire Philippe Laffont, trimmed holdings in Nvidia by 14.1% to 9.9 million shares, aligning with reductions by other hedge funds such as Bridgewater and Scion Asset Management. Coatue also reduced exposure to Tesla, Amazon, CoreWeave, and Arm Holdings, while increasing positions in Microsoft, Meta, and Alibaba, reflecting a selective approach to Big Tech and AI.
• Lone Pine Capital and Tiger Global cut stakes in Meta Platforms by 34.8% and 62.6%, respectively, while Tiger Global also exited positions in Eli Lilly, Novo Nordisk, and CrowdStrike, instead taking new positions in Netflix (NFLX.O) and Klarna (KLAR.N).

Market Context and Implications

The Q3 shift comes after a period of exceptional gains for AI and tech stocks, which prompted bullish positions among hedge funds in Q2. Since then, lofty valuations have moderated, leading to a rotation into sectors like payments, software, and e-commerce.

The broader market remained positive during the third quarter, with the S&P 500 rising nearly 8% and the Nasdaq 100 up about 9%. Bond markets also posted gains on expectations of monetary easing, which lowered benchmark 10-year Treasury yields by approximately seven basis points.

Hedge funds’ portfolio adjustments offer insights into how major institutional investors are managing valuation risk in high-growth sectors, while seeking opportunities in more resilient, diversified industries.

Berkshire Hathaway’s Moves Highlight Tech Focus

Separately, Berkshire Hathaway disclosed a $4.3 billion stake in Alphabet while further reducing its Apple holdings, offering one of the last looks at Warren Buffett’s equity portfolio before stepping down as CEO. This underscores the continuing focus among institutional investors on Big Tech, AI, and select growth opportunities.