Investment firm Tiger Global Management LLC made a number of significant changes to its equity portfolio in the fourth quarter of 2023, according to the latest public data. These strategic decisions highlight the firm’s priority investment directions for 2024 and reflect Tiger Global analysts’ assessments of the outlook for key U.S. equity market sectors.
Significant reductions in exposure to Big Tech stocks
The most significant move by Tiger Global was a 24% reduction in exposure to Alphabet Inc (Google) shares, from 5.4 million to 4.1 million Class A shares. This strategic decision comes amid slowing online advertising revenue growth in a difficult macroeconomic environment. However, Google remains an important holding in the portfolio, valued at around $10 billion at current market prices.
At the same time, Tiger Global also reduced its exposure to other technology stocks, such as:
Meta Platforms Inc (Facebook): down 16.1%, from 9 million shares to 7.5 million shares
Nvidia: down 12.9%, from 1.1 million shares to 968,355
Microsoft: reduction of 12.8%, from 6.1 million shares to 5.34 million.
These decisions show Tiger Global’s more moderate outlook for near-term growth for technology companies amid the global economic slowdown.
Strategic exposure increases in e-commerce and crypto
In contrast to reductions in exposure to technology stocks, Tiger Global has significantly increased its investments in the e-commerce sector and fintech/crypto companies:
Exposure to Amazon increased 24.1%, from about 4 million shares to 4.9 million. Amazon remains one of the most important pillars of Tiger Global’s strategy, valued at over $14 billion.
The firm also fully liquidated its previous investment in Coinbase Global Inc, a crypto exchange and custody company, recently valued at over $8 billion.
These two contrasting moves highlight Tiger Global analysts’ assessment that the growth outlook for the crypto and fintech sector is uncertain in 2023, while e-commerce remains a strategic sector.
Reducing exposure to JD.com in China
Last but not least, the investment fund also reduced its exposure on shares of Chinese online retailer JD.com, from 9.8 million ADR shares to 8.8 million, a drop of 10.7%. The move reflects the uncertain near-term growth outlook for the Chinese economy.
Conclusion
Recent portfolio restructuring decisions highlight that Tiger Global expects a slowdown in earnings growth in the technology sectors and a potential economic downturn in 2023. As such, the company has strengthened its strategic exposures in areas more resilient to the economic cycle, such as e-commerce. On the other hand, Tiger Global analysts seem skeptical about the near-term potential of the crypto and fintech sector.
All in all, these investment decisions provide valuable insights into the expectations of one of the world’s largest global investors for economic dynamics this year. It remains to be seen to what extent Tiger Global analysts’ forecasts will materialize.
