Saudi Arabia's sovereign wealth fund PIF is investing heavily in the AI trend! They are buying a large number of call options on ARM
Saudi Arabia's sovereign wealth fund PIF has shown a keen interest in the investment frenzy in the field of artificial intelligence in its latest 13F report, heavily buying bullish options on ARM. PIF added 13 new stocks to its portfolio, with ARM ranking as the seventh largest holding. Additionally, PIF reduced its holdings in the stocks of Facebook and Instagram's parent company Meta, but they remain the eighth largest holding. It is worth noting that PIF also initiated positions in stocks of other leaders in the artificial intelligence field. The report indicates that PIF has shown great interest in the global investment frenzy surrounding artificial intelligence
According to the disclosure from the U.S. Securities and Exchange Commission (SEC), the largest sovereign wealth fund in Saudi Arabia, the Public Investment Fund (PIF), submitted its first-quarter U.S. stock holdings report (13F) until March 31, 2024.
The statistics show that the total market value of PIF's U.S. stock holdings in the first quarter reached $20.6 billion, compared to approximately $35.2 billion in the previous quarter, a decrease of nearly 40% on a quarter-on-quarter basis. Detailed data shows that PIF added 13 stocks to its portfolio, increased holdings in 4 stocks, reduced holdings in 5 stocks, and completely sold out of 25 stocks. The top ten holdings accounted for 82.95% of the total market value of U.S. stock holdings, reflecting a very high total weight of PIF's top ten holdings.
In the top ten major holdings of the Saudi sovereign wealth fund PIF in the first quarter, most positions remained unchanged compared to the previous quarter. However, PIF made a significant new purchase of call options for ARM (ARM.US), a leader in the chip design field, in the first quarter, and the position is now the seventh largest holding. Facebook and Instagram's parent company Meta (META.US) saw a significant 77% reduction in holdings by PIF in the first quarter, but still remains the eighth largest holding. Additionally, PIF added new call options for Starbucks (SBUX.US) and Booking (BKNG.US) in the top ten holdings. It is worth noting that this latest 13F report from PIF shows the sovereign wealth fund's unprecedented pursuit of the global investment frenzy surrounding AI. In the first quarter, PIF not only added ARM to its portfolio but also added call options for AMD, NVIDIA, Microsoft, and other leaders in the AI field.
Specifically, Uber (UBER.US) ranks as the largest holding of the Saudi sovereign wealth fund PIF, with approximately 72.84 million shares, a market value of around $5.6 billion, accounting for 27.29% of the investment portfolio, with no change in holdings from the previous quarter.
The electric vehicle newcomer Lucid (LCID.US) ranks as the second largest holding of PIF, with approximately 1.4 billion shares, a market value of around $3.9 billion, accounting for 19.06% of the investment portfolio, with no change in holdings from the previous quarter. PIF is the largest shareholder of Lucid, with a stake of nearly 60%. The unchanged stake in Lucid by PIF has also relieved Lucid investors, especially after the stock plummeted by 39% in 2023 and has dropped by over 30% this year, causing concerns among investors about whether PIF would reduce its holdings due to shrinking investment value One of the world's largest game developers, Electronic Arts (EA.US), ranks third in the top ten holdings, with approximately 24.81 million shares held, a market value of around 3.3 billion US dollars, accounting for 16.02% of the investment portfolio. The holding quantity remains unchanged from the previous quarter.
The developer of the popular game "Grand Theft Auto" (GTA), Take-Two Interactive Software (TTWO.US), ranks fourth, with approximately 11.41 million shares held, a market value of around 1.7 billion US dollars, accounting for 8.25% of the investment portfolio. The holding quantity remains unchanged from the previous quarter.
British industrial giant Linde (LIN.US) ranks fifth, with approximately 1.21 million shares held, a market value of around 561 million US dollars, accounting for 2.73% of the investment portfolio. The holding quantity remains unchanged from the previous quarter.
Among the top ten major holdings of the Saudi sovereign wealth fund PIF, the targets ranked 6-10 are: Cummins (CMI.US), call options on ARM (ARM.US), Meta, call options on Starbucks (SBUX.US), and call options on Booking (BKNG.US). Among them, the call options on ARM are a new position for PIF in the first quarter. ARM is one of the most important chip companies, licensing the core instruction set architecture for almost all mobile chips globally. While ARM architecture is predominantly used in the smartphone field, it is increasingly being adopted in the computer and AI server chip sectors. NVIDIA's self-developed Grace CPU is based on ARM architecture, Amazon's self-developed data center Graviton server processor also uses ARM architecture, and Microsoft's latest self-developed customized AI chip Azure Cobalt 100, designed specifically for running cloud computing workloads on Microsoft Azure cloud servers, is also built on ARM architecture. Riding the wave of global AI investment, ARM's stock price surged by as much as 66% in the first quarter.
In terms of other holdings ranked 6-10, there were no changes in the position of Cummins, a well-known American high-end heavy-duty engine and power unit manufacturer. PIF reduced its holdings in Meta, the parent company of Facebook and Instagram, by over 77%, but it still ranks in the top ten. In the first quarter, Meta's stock price rose by over 37%, surpassing 300% since 2023, indicating that PIF may have been profit-taking. The stock call options for coffee giant Starbucks and online travel booking service provider Booking are new positions, reflecting PIF's optimistic sentiment towards the continued recovery of global coffee consumption and the tourism industry.
In addition, Amazon (AMZN.US) call options are also the new positions for PIF in the first quarter, and PIF has made large purchases, ranking eleventh. Citigroup, Morgan Stanley, Goldman Sachs and other Wall Street giants have positioned Amazon as "the hottest e-commerce or internet stock in 2024." Wall Street analysts' bullish confidence in Amazon's stock price outlook mainly comes from artificial intelligence. They believe that Amazon is expected to be in the best position in this wave of global corporate AI competition with innovative AI-related products deeply integrated with AWS. This is also a key reason for Amazon's recent historic high stock price, with a rise of over 22% this year and a 19% increase in the first quarter.
AMD (AMD.US), Microsoft (MSFT.US), and NVIDIA (NVDA.US) call options have all been heavily bought by PIF as new positions in the first quarter, with holdings ranking 16th, 22nd, and 23rd respectively. Adobe (ADBE.US) call options have also seen significant additions by PIF, reflecting PIF's active participation in this global AI investment frenzy and bullish expectations for these AI industry leaders.
Looking at the changes in holdings, the top five purchases by the Saudi sovereign wealth fund PIF in the first quarter are: ARM call options, Starbucks call options, Booking call options, Amazon call options, and Adobe call options. Among these purchased positions, ARM, Amazon, and Adobe's stock prices have all greatly benefited from this global AI investment frenzy since 2023, steadily climbing.
Saudi Arabia's sovereign wealth fund PIF's top five selling targets in the first quarter were: Utilities Sector ETF (XLU.US), Live Nation Entertainment (LYV.US), Carnival Cruise Line (CCL.US), Booking, and Salesforce (CRM.US). Among them, PIF completely sold off Booking's shares in the first quarter, as well as popular targets such as Salesforce, Carnival Cruise Line, and South Korean e-commerce giant Coupang Inc (CPNG.US).