Is buying Alibaba a "mistake"? A 40 billion hedge fund increased its holdings in Microsoft and Texas Instruments in the first quarter!

Investment firm Generation Investment Management, founded by former US Vice President Al Gore, recently made significant adjustments to its investment portfolio. This includes selling all of its Alibaba shares, buying Microsoft and Texas Instruments. Generation called the purchase of Alibaba stock a "mistake".

Q1 Alibaba Sell-Off

Generation sold all of its shares in Alibaba in the first quarter.

In Q1, Generation also bought shares in Microsoft, Texas Instruments (TXN), and began investing in South Korean e-commerce company Coupang.

As of the end of Q1, Generation managed approximately $42.7 billion in assets.

As of the end of 2022, Generation held 3.7 million Alibaba ADRs, but sold them all at some point during the first quarter.

Generation's co-chief investment officers, Miguel Nogales and Mark Ferguson, wrote in a letter to investors in April: "In some cases, we overestimated the quality of the companies we invested in. We classify our investments in Alibaba and Industrial Bank as 'mistakes'. Both of these companies' stocks have now been sold."

Microsoft and Texas Instruments Increase

Nogales and Ferguson praised Microsoft. As Generation focuses on environmental, social, and governance (ESG) issues, their assessment of the company's cloud computing platform Azure aligns with this.

They said: "We can see that Azure has a positive impact on climate change." "Cloud computing is much more efficient than individual companies running their own servers in data centers."

In the first quarter, Generation added 1.1 million shares of Microsoft stock, increasing its investment to 5.2 million shares. Microsoft's stock price rose 20% in the first quarter and has risen 9.4% so far in the second quarter.

In addition, Generation increased its position in Texas Instruments by 1.6 million shares, bringing its total holdings to 4.3 million shares.

Generation also purchased 491,844 shares of Asian e-commerce company Coupang.