It’s been a tumultuous year for tech stocks, with the S&P 500 index down 10% year-to-date, largely due to significant declines in major tech companies like Meta Platforms and Nvidia. Amid this backdrop, billionaire fund manager Stephen Yiu, who oversees the Blue Whale hedge fund, has made bold investment decisions, betting on Nvidia while divesting from Meta.
Key Takeaways
- Stephen Yiu, managing funds for billionaire Peter Hargreaves, has shifted his investment strategy amid a tech stock downturn.
- Yiu sold his holdings in Meta and Microsoft, citing concerns over ad revenue and AI spending.
- He increased his investment in Nvidia, believing in its long-term potential despite recent challenges.
The Current State Of Tech Stocks
The technology sector has faced significant headwinds in 2025, with fears of a global economic slowdown impacting corporate budgets. Major players like Nvidia and Meta have seen their stock prices drop by 24% and 14%, respectively. This downturn has raised concerns among investors about the sustainability of tech stock valuations.
The surge in AI demand has previously fueled growth in the tech sector, with companies investing heavily in AI infrastructure. For instance, Nvidia has benefited from increased demand for its GPUs, which are essential for AI applications. However, the recent economic climate has led to a reevaluation of spending in the sector, with rising unemployment and inflation dampening consumer sentiment.
Yiu’s Investment Strategy
Yiu’s Blue Whale hedge fund, which has approximately $1.5 billion in assets, has a strong focus on technology, with 40% of its portfolio allocated to this sector. His recent moves include:
- Selling Meta Platforms: Yiu divested from Meta, which had represented about 3% of his fund’s assets, due to concerns that a global economic slowdown would negatively impact the company’s advertising revenue.
- Selling Microsoft: He also sold Microsoft shares, fearing that the company’s AI investments might exceed its cash flow.
- Buying Nvidia: In contrast, Yiu has increased his stake in Nvidia from 7% to 10% of his portfolio, viewing the company as well-positioned to thrive in the ongoing AI race despite facing challenges such as a $5.5 billion charge due to new restrictions on chip sales to China.
The Future Outlook
While Yiu’s decisions reflect a cautious approach to the current market volatility, his bullish stance on Nvidia suggests confidence in the company’s long-term growth potential. Nvidia’s revenue has surged, driven by demand for its advanced chips, and the company is expected to continue benefiting from the AI boom.
However, the broader tech landscape remains uncertain. Analysts warn that the potential for a recession could lead to further declines in tech stock valuations, prompting companies to reconsider their capital expenditures. As the market navigates these challenges, Yiu’s strategic bets on Nvidia and his retreat from Meta and Microsoft highlight the complexities of investing in today’s tech environment.
In conclusion, as the tech sector grapples with economic pressures, the moves made by influential fund managers like Stephen Yiu will be closely watched by investors seeking insights into the future of technology investments.