(Bloomberg) — Investment fund Blue Whale Capital LLP has reduced its stakes in major U.S. technology companies due to concerns about the costs of artificial intelligence, the Financial Times reported.
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The Blue Whale Growth Fund, backed by billionaire Peter Hargreaves, has reduced its stake in Microsoft Corp. to around 2% of the portfolio compared to 8% in January this year, fund manager Stephen Yiu was quoted as saying by the newspaper. The divestment pushed the stock out of the fund’s top 10 for the first time since its inception in 2017, according to the FT.
Yiu also reduced its stake in Meta Platforms Inc. from 5% to 3% of the fund, the report said.
Microsoft’s return on invested capital is “likely to decline from now on, given the significant investments made in AI infrastructure”, Yiu was quoted as saying by the FT. The fund would consider completely selling its stake in Microsoft if investments in AI outpace cash generation, he said.
Aside from Nvidia Corp., the fund is increasingly less positive on the rest of the so-called Magnificent Seven tech stocks due to AI spending, Yiu said. Nvidia continues to be among the fund’s top holdings, according to a list posted on its website.
Blue Whale did not immediately respond to requests for additional comment sent outside of regular business hours.
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