Billionaire investor Ken Griffin, founder and CEO of Citadel Advisors — one of the world’s most successful hedge funds — has made significant moves in Q3, ramping up stakes in several major stocks. Since its inception in 1990, Citadel has generated over $74 billion (£56.2 billion) in net gains, thanks to Griffin’s quantitative investing approach.
In recent months, Griffin’s hedge fund executed massive trades, increasing stakes in dozens of stocks while trimming positions in others like Amazon, Coca-Cola, Home Depot, and Citigroup. According to the latest regulatory filing with the US Securities and Exchange Commission (SEC), Citadel significantly increased its holdings in the so-called Magnificent 7 stocks — despite ongoing concerns over an AI bubble.
Explosive Growth in Major Holdings
The most striking move was Citadel’s 12,693% increase in Meta Platforms (formerly Facebook). The hedge fund purchased over 1.9 million shares for approximately $1.4 billion (£1 billion). Similarly, Citadel’s stake in Visa surged by an astonishing 14,838%, acquiring over 3 million shares worth around $1 billion (£759.5 million).
Norfolk Southern saw the largest percentage increase — a staggering 18,025%. Citadel bought over 1.9 million shares, investing roughly $545.2 million (£414 million).
AI and Technology: Confidence in Growth
In Q3, Citadel also increased its stake in Tesla by 279%, alongside substantial boosts in Alphabet Class A (+200.2%), Apple (+108.2%), Microsoft (+100.3%), and Nvidia (+21.4%). Conversely, the hedge fund reduced its Amazon holdings by nearly 40%, selling 2.1 million shares.
These aggressive AI-related investments are notable, especially as other prominent investors take a more cautious stance. Billionaires like David Tepper and Michael Burry have expressed scepticism, betting against the AI boom amid fears of overvaluation and the high costs associated with AI development, which may yield limited returns.
Even Warren Buffett’s Berkshire Hathaway sold over 41 million Apple shares in Q3 but added Alphabet’s Class A stock to its portfolio — highlighting diverging strategies among top investors.
Broader Investment Trends
Citadel increased its stakes in Broadcom, T-Mobile US, and Palo Alto Networks by more than 800%, with a 783.4% rise in Costco Wholesale, acquiring 422,240 shares during the quarter. As of now, Microsoft, Nvidia, and Meta remain Citadel’s top holdings, followed by Apple and Visa.
The hedge fund’s aggressive positioning in AI and tech stocks reflects a broader industry trend, with many investors betting heavily on the sector’s growth prospects.
BlackRock’s View on the AI Bubble
BlackRock CEO Larry Fink recently addressed concerns over an AI bubble, emphasising that AI investments extend beyond chips to encompass data centres, HVAC, power grids, and IT infrastructure.
‘I think some of the investments we’ve seen so far are not purely on AI; they’re on cloud computing and the power of cloud,’ Fink told CNBC. ‘I don’t believe this is a bubble, but rather capital that’s well spent in most cases.’
Fink argued that the large-scale capital investments in AI are essential for the US to maintain its leadership position globally. He acknowledged that there will be failures and winners, but diversified portfolios — including leaders like Alphabet, Meta, and Microsoft — will fare well.
‘We’re going to have some big winners and some big losers, but if you have a diversified portfolio, you’re going to be fine,’ he concluded.
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Originally published on IBTimes UK
