Looking at what successful hedge fund managers buy and hold is a great way for investors to drum up ideas about which stocks to pick. Fortunately, anyone with over $100 million in holdings must disclose what they own to the SEC, then they make that information public knowledge 45 days after the quarter ends. While this isn't necessarily a real-time view into what these hedge fund managers are doing, if you consider how long they've held the stocks, it could provide some valuable insights.
One billionaire hedge fund manager I follow is Chase Coleman, who runs Tiger Global Management. He has invested a significant amount of his hedge fund's money in some top-performing artificial intelligence (AI) stocks and has held these companies for a long time. I think investors should consider following Coleman's approach and buying some of the same stocks that he is holding.
Coleman has nearly half of his holdings in five AI stocks
Coleman has a massive amount of his fund wrapped up in just a handful of stocks. Some of the biggest ones are:
| Holding | Percent of Portfolio |
|---|---|
| Meta Platforms (META -5.00%) | 16.5% |
| Microsoft (MSFT -3.58%) | 8.5% |
| Alphabet (GOOG -3.21%) (GOOGL -3.43%) | 7.4% |
| Amazon (AMZN -3.92%) | 5.3% |
| Nvidia (NVDA -7.03%) | 4.9% |
Data source: Hedge Follow.
Altogether, that accounts for 42.6% of his portfolio, so it's clear that he's focusing on these big tech AI players. These also aren't stocks that he's trading in and out of and just happened to hold at the end of Q4. Over the past years, he has basically held onto the same number of shares he's always had, which was a great strategy in 2024.
However, the market has started to sour on these five companies lately, and each is down around 20% from its all-time highs established in February.
The pessimism likely comes from economic uncertainty caused by tariffs or a potential trade war. The market is worried that it could cause these companies' base businesses to struggle. If so, they won't have as many excess funds to spend on AI, disproportionately affecting Nvidia (which is down the most of these five).
NASDAQ: NVDA
Key Data Points
However, I don't expect AI spending to be affected much because the AI arms race is one these AI hyperscalers can't afford to lose. As a result, I think the AI gravy train will likely continue, as there are massive gains that AI can still provide to users.
With each company down markedly, if you don't have significant exposure to this cohort like billionaire Chase Coleman, there have seldom been better times to open a position than now.
These stocks haven't been this cheap in a while
Because each company is growing rapidly, I'm going to use the forward price-to-earnings (P/E) ratio to value the stocks. For most of these stocks, you have to rewind back to 2023 to get the same price that you have to pay for them today.
NVDA PE Ratio (Forward) data by YCharts
However, some stocks, like Amazon and Alphabet, weren't even this cheap at the start of 2023, when the market was worried about an impending recession. All of this indicates that the market is extremely pessimistic right now, which gives long-term investors a great entry point.
The biggest question investors must ask is: Will today's events affect these stocks three to five years down the road? If the answer is yes, you'll have to do more thinking. If the answer is no (which I think is the correct answer), then today looks like a great buying opportunity, as the tailwinds that these AI companies are experiencing likely won't ease up too much over the next few years.
