Wall Street's Big Shift: Q1 13F Reports Reveal New Bets on AI, China, and Bitcoin

Wall Street's Big Shift: Q1 13F Reports Reveal New Bets on AI, China, and Bitcoin

In the shadow of mounting global tensions and technological disruption, Wall Street's investment titans have dramatically recalibrated their portfolios, according to recently released Q1 13F filings. The reports, which offer a rare glimpse into the strategies of the world's most influential money managers, reveal significant shifts toward artificial intelligence, Chinese equities, and cryptocurrency exposure—while some legendary investors are quietly moving to the sidelines.

The Great Divergence: AI Megacaps Facing Split Decisions

The most striking trend emerging from this quarter's filings is the growing schism between passive giants and active stock-pickers on the future of AI-focused technology companies.

BlackRock, despite reporting a 3.6% quarter-over-quarter decline in total market value to approximately $4.76 trillion, has doubled down on the sector's biggest names. The world's largest asset manager increased its positions in NVIDIA, Microsoft, and Apple—which, together with Amazon and Meta, now constitute more than 20% of its massive portfolio.

"The concentration we're seeing in BlackRock's portfolio signals continued institutional confidence in what I'd call the 'own-the-rails' strategy—betting on the platform-level winners in AI infrastructure rather than trying to pick specific applications," noted a veteran technology fund manager who requested anonymity because they weren't authorized to speak publicly.

But not everyone shares this conviction. Bridgewater Associates, the world's largest hedge fund, cut its position in NVIDIA along with Google, while simultaneously reducing its top position in the SPDR S&P 500 ETF by nearly 60%. This dramatic pivot suggests growing concerns about U.S. technology valuations at the highest levels of institutional investing.

Even more striking is the stance taken by Michael Burry, the investor made famous in "The Big Short." Burry has nearly liquidated his entire stock portfolio, maintaining only a position in Estée Lauder while establishing put options to bet against both NVIDIA and Chinese tech giant Alibaba.

"When someone with Burry's track record moves almost entirely to cash and puts, it's the financial equivalent of seeing animals flee before an earthquake," remarked a hedge fund analyst specializing in macroeconomic trends. "His positioning suggests he anticipates a significant market correction, potentially triggered by what he sees as excessive valuations in AI stocks."

The China Conundrum: Major Players Double Down Despite Risks

Perhaps the most counterintuitive trend revealed in the filings is the substantial increase in Chinese equity exposure among several heavyweight funds, even as geopolitical tensions between the U.S. and China remain elevated.

Hillhouse HHLR stands out with a remarkable 23% increase in total market value, driven largely by new positions or increased holdings in nearly 20 U.S.-listed Chinese stocks. The fund now holds nine Chinese companies among its top ten positions, accounting for approximately 88% of these key holdings.

This concentrated bet on Chinese consumer technology and services comes despite ongoing regulatory scrutiny and delisting threats that have plagued these stocks for years. Hillhouse trimmed its Alibaba position by 20% and exited Dada Group entirely, but significantly increased positions in Baidu, Li Auto, Futu Holdings, PDD, NetEase, JD.com, and Trip.com.

"Hillhouse's positioning represents a pure calculation that the deep discounts in Chinese ADRs and potential consumer recovery outweigh the geopolitical risks," observed a portfolio strategist at a major investment bank. "It's a high-conviction bet that China's service economy will accelerate regardless of trade tensions."

This sentiment is echoed in Bridgewater's portfolio, which added 5.4 million shares of Alibaba, increased its Baidu position, and took new stakes in JD.com. Even David Tepper, despite trimming some Chinese holdings, still counts Alibaba, Pinduoduo, and JD.com among his top five positions.

However, this enthusiasm isn't universal. While these specialist funds increase their exposure, Alibaba itself continued to reduce its stake in Chinese electric vehicle maker XPeng, selling 3.08 million shares—an 8.13% reduction. This marks the continuation of a trend that included a significant divestment by its subsidiary Taobao China Holding Ltd. in March.

Bitcoin Goes Mainstream as Goldman Takes the Lead

In perhaps the clearest sign yet of cryptocurrency's institutional acceptance, Goldman Sachs substantially increased its holdings in the iShares Bitcoin Trust ETF (IBIT) by 28%, bringing its total position to over $1.4 billion. This move makes Goldman the largest institutional investor in IBIT and signals a major shift in how traditional financial powerhouses view digital assets.

"Five years ago, the idea of Goldman Sachs becoming the top holder in a Bitcoin ETF would have seemed absurd," reflected a cryptocurrency investment advisor. "This represents the final phase of Bitcoin's journey from fringe speculation to legitimate institutional asset class."

Goldman's aggressive positioning comes as more traditional value investors like Berkshire Hathaway continue to avoid the cryptocurrency space entirely. Warren Buffett's conglomerate instead focused on slashing bank stocks—completely exiting Citigroup—while doubling down on beer maker Constellation Brands and maintaining its substantial Apple holdings.

Defensive Postures: Gold, Cash, and Careful Rotations

As markets navigate the late stages of an economic cycle, several major funds are adopting increasingly defensive postures.

Bridgewater's new positions in gold ETFs, coupled with its sharp reduction in U.S. index exposure, suggest growing concerns about both inflation and potential growth shocks. This classic "Dalio playbook" of fading U.S. beta while rotating into hard assets and selective international equities indicates the fund is preparing for market turbulence.

Bill Gates slightly trimmed his Berkshire Hathaway holdings ahead of Warren Buffett's anticipated retirement, while maintaining Microsoft and Waste Management as his top positions—a focus on quality companies with strong cash flows and dividends.

Even Bill Ackman's portfolio suggests careful positioning, with Uber becoming his largest holding after completely exiting Nike before "reciprocal tariff" announcements. His top holdings remain concentrated in consumer discretionary, real estate, and information technology sectors—areas that typically offer some resilience during economic transitions.

The Outliers: Extreme Positioning Signals Caution

Beyond the broader trends, certain managers have taken positions so extreme they deserve special attention.

Michael Burry's near-total liquidation of equities represents the most bearish stance among major investors. By maintaining just a single stock position while establishing put options against both U.S. technology and Chinese companies, Burry is effectively betting on a significant market correction across multiple geographies and sectors.

At the other end of the spectrum, George Soros increased his holdings in S&P 500 ETFs while reducing Russell 2000 ETF exposure—suggesting a preference for large-cap quality over small-cap growth. His fund also made strategic investments in artificial intelligence, space communication, and mining companies, exiting Taiwan Semiconductor Manufacturing Company and Super Micro Computer while initiating a position in NVIDIA.

ARK Invest continued its gradual reduction of Tesla holdings for the third consecutive quarter, though the electric vehicle maker remains its top position. Cathie Wood's fund continues to focus on emerging technology sectors including artificial intelligence, blockchain, and biotechnology—maintaining its "disruptive innovation" thesis while reducing single-stock concentration risk.

What It All Means: Portfolio Implications

For investors watching these institutional moves, four key themes emerge from the Q1 filings:

First, the AI sector is experiencing an emerging rift between passive investors continuing to accumulate megacap names and active managers beginning to hedge against valuation risks. This suggests consideration of a barbell approach: maintaining exposure to semiconductor infrastructure companies while potentially using options strategies to hedge against volatility in the most heavily owned names.

Second, Chinese equities are being approached with sophisticated nuance rather than binary positioning. Specialists are building exposure to domestic consumer services companies like Pinduoduo and JD.com while reducing stakes in more legacy-oriented businesses—a selective approach that aims to capture policy tailwinds without taking on pure market beta risk.

Third, cryptocurrency has completed its institutional acceptance phase with Goldman's dramatic increase in Bitcoin ETF holdings. For investment mandates that cannot hold Bitcoin directly, top-tier ETFs have quickly evolved into liquid alternatives that meet institutional standards.

Finally, the growing focus on defensive positioning across multiple funds suggests careful preparation for late-cycle dynamics. From Berkshire's investments in consumer staples and energy to Bridgewater's gold positions, major allocators are increasingly emphasizing cash flow resilience and inflation hedges.

"What's most revealing about this quarter's filings isn't any single position but the collective movement toward hedging against multiple scenarios," observed a chief investment strategist at a major wealth management firm. "The smartest money is preparing for divergent outcomes: continued AI-driven growth, Chinese consumer recovery, cryptocurrency institutionalization, and potential market corrections—often simultaneously within the same portfolio."

As markets navigate the complex crosscurrents of technological disruption, geopolitical tension, and monetary policy uncertainty, these 13F filings offer a valuable—if backward-looking—window into how the world's most sophisticated investors are positioning for what many expect to be an increasingly volatile environment in the months ahead.