Dan Loeb divests almost all of his holdings in Magnificent 7 stocks
- Dan Loeb has divested from nearly all of his holdings in the Magnificent 7 stocks, including significant reductions in Meta and Amazon.
- The Magnificent 7 stocks, having previously led the market, have seen a downturn this year due to concerns about tariffs and AI expenses.
- Loeb is shifting his investment strategy away from technology stocks toward event-driven strategies and private credit.
On April 23, 2025, in New York, hedge fund manager Dan Loeb announced significant changes to his investment portfolio, particularly divesting from the 'Magnificent 7' stocks, which include major companies like Amazon, Microsoft, and Meta. Loeb revealed that earlier in the year, he had already sold out of Meta and reduced his stake in Amazon, indicating that he has almost entirely exited from these prominent tech holdings, retaining only a small position in Amazon. This movement illustrates a strategic shift fueled by various market pressures, including tariff-related turmoil impacting investor sentiment. The 'Magnificent 7' stocks have faced a downturn in 2025, following a two-year period of remarkable growth. Tesla has particularly struggled, with a decline exceeding 40%, while other stocks within the group, including Amazon, Alphabet, and Apple, have seen declines around 20%. Loeb attributed the downturn partly to growing concerns regarding artificial intelligence expenses and the adverse effects of tariffs implemented by the Trump administration. The sentiment on Wall Street, once buoyed by optimism, has shifted to a sense of uncertainty amid fears about the sustained impact of these economic challenges. Loeb's investment strategy has transitioned towards focusing on event-driven strategies and activism as opposed to previous strategies that heavily weighted towards technology stocks. He expressed particular interest in expanding into private credit markets, which he sees as presenting 'massive' opportunities for growth amidst the current climate of market volatility. The hedge fund manager's pivot reflects a broader trend among investors looking to reposition as the market landscape becomes increasingly unpredictable. In addition to his comments on the stock market, Loeb raised concerns regarding the impact of President Trump's policies on investor confidence and the rule of law, suggesting that the nature of the government's actions has led to a lingering uncertainty on Wall Street. He indicated that the hesitancy surrounding Trump's tariffs and their effects on the economy is likely to persist, shaping future investment decisions and the overall market environment moving forward.