Recent data from Jefferies has revealed a significant shift in hedge fund portfolios, particularly within Magnificent 7 stocks, with managers favouring Amazon and Microsoft over Netflix and Meta, according to a report by Investing.com.
Hedge funds increasing have increased their allocations to Amazon by 3.8% and and Microsoft by 2%, reflecting increased confidence in the tech giants, driven by the former’s expanding dominance in cloud computing and the latter’s strong foothold in AI, enterprise software and cloud services.
Netflix and Meta meanwhile, saw cuts in their portfolio weightings of 2.9% and 2.4% respectively, indicating a more cautious stance from hedge funds.
Jefferies also noted a broader trend of hedge funds shifting away from secular growth stocks, which now make up 49.5% of their portfolios, down from 54.5% in late April. This reduction has been redirected towards cyclical stocks, which saw a 4.8% increase in weightings, reaching 52.5%. This shift highlights a preference for sectors more sensitive to economic cycles.
