Blue Whale Capital Reduces Holdings in Microsoft and Meta Amid AI Cost Concerns

Blue Whale Capital LLP has reduced its holdings in major U.S. tech companies due to concerns over artificial intelligence costs. The Blue Whale Growth Fund, backed by billionaire Peter Hargreaves, cut its stake in Microsoft (MSFT, Financial) from 8% in January to about 2%. This reduction marks the first time since the fund’s inception in 2017 that Microsoft has fallen out of its top ten holdings. Additionally, the fund’s stake in Meta Platforms Inc. has been reduced from 5% to 3%.

Fund manager Stephen Yiu expressed concerns that Microsoft’s return on investment might decline due to significant AI infrastructure investments. He indicated that if AI spending surpasses cash output, the fund might consider selling its Microsoft shares entirely. While the fund remains optimistic about Nvidia, it has become less bullish on other major tech stocks.

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