Halvorsen Buys Nvidia, Tesla, and Meta; Dumps Alphabet

According to a 13F filing with the Securities and Exchange Commission, Ole Andreas Halvorsen of Viking Global Investors bought more AI stocks and dumped his fund's stake in the cheapest member of the "Magnificent Seven" during the first quarter.

The filing deadline, May 15, outlines trading activity for the quarter that ended in March.

Halvorsen oversees around $31.5 billion in AUM spread across 91 holdings and concentrates his portfolio in his best ideas.

Viking Global's average holding time is a little over 17 months, which signals a willingness to swing trade and lock in profits.

AI Stock Purchases

Viking Global green-lit the purchase of three artificial intelligence stocks in the quarter that ended in March.

The stakes in Meta Platforms and Tesla are both new. The addition to Viking Global's Nvidia stake increased its position by about 222% from the quarter that ended in December.

PwC estimated that AI would provide a $15.7 trillion boost to the global economy.

Nvidia's Hopper (H100) and Blackwell graphics processing units (GPUs) are the top option for businesses wanting to run generative AI solutions.

Meta has incorporated generative AI solutions into its platform for advertisers, while AI is at the heart of Tesla's full self-driving software that assists drivers.

Nvidia's gross margin has been declining for a year. Meta's ad-driven operating model is intricately tied to the health of the U.S. and global economy. Tesla's EV margin has plunged as competitive pressures have mounted.

Alphabet Sale

Ole Andreas Halvorsen oversaw the complete sale of 22 stocks during the first quarter, as well as reductions in 28 others.

Among the stocks sold was Alphabet, the cheapest Magnificent Seven stock, based on forward price-to-earnings (P/E) ratio. Viking Global sold all 3,661,375 of the Class A shares it had held since the third quarter of 2024. Alphabet was Halvorsen's 14th-largest holding when 2024 came to a close.

Reasons for the Sale

One of the possible reasons Halvorsen's interest in Alphabet faded in the first quarter has to do with the questions surrounding the use of LLMs in search.

Another potential worry is the U.S. Justice Department's attempt to break up Alphabet by forcing the company to sell its Chrome browser and its Android operating system.

The third factor that may have played a role in Ole Andreas Halvorsen ditching his fund's Alphabet stake is the prospect of the U.S. economy falling into a recession. In the neighborhood of three-quarters of Alphabet's net sales come from advertising.

With the initial first-quarter read on U.S. gross domestic product showing an annual 0.3% contraction, there's genuine concern of a recession taking shape.

Google has maintained an 89% to 93% share of worldwide internet search. Alphabet has copious amounts of cash on hand to deploy in various AI solutions.

With Alphabet stock trading at a forward P/E of 16, the potential reward for investors appears to heavily outweigh any near-term risks.