(Bloomberg) — A Blue Whale Capital LLP investment fund reduced its stakes in major US technology companies on concern about the costs of artificial intelligence, the Financial Times reported.
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The Blue Whale Growth Fund, backed by billionaire Peter Hargreaves, cut its holding in Microsoft Corp. to about 2% of the portfolio from 8% in January this year, fund manager Stephen Yiu was quoted by the newspaper as saying. The disinvestment 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. to 3% of the fund from 5%, the report said.
Microsoft’s return on invested capital is “likely to decline from here, given the significant investment made in AI infrastructure,” the FT cited Yiu as saying. The fund would consider selling its Microsoft stake completely if AI investments outweigh 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 because of spending on AI, Yiu said. Nvidia continues to rank among the fund’s top holdings, according to a list on its website.
Blue Whale didn’t immediately respond to requests for further comment sent outside usual office hours.
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