Altimeter Capital Chairman and CEO Brad Gerstner said he’s taken some chips off the table after tech stocks’ strong run this year, but he remains bullish on stocks that are once again accelerating thanks to artificial intelligence. “All of these stocks have risen significantly just at the beginning of this year, and things have gotten a little worse,” Gerstner said on CNBC’s “Halftime Report” on Tuesday. “If you want to take a little break today by just reflecting on the fact that you made a yearly profit in the first few months of the year, I think that makes sense.” The widely followed investor said he has cut his own exposure by 10 to 20 percentage points in his hedge fund and long-only fund, both by adding short positions and by trimming some overall sizes positions. “People think they always invest 100%. This is not the case when the market rises so much at the beginning of the year when the background is so volatile. I think it makes sense to cut costs a little bit and that’s what we did. done across all our portfolios,” he said. At the end of 2023, Altimeter’s top five holdings included Snowflake, Meta, Uber, Microsoft and Nvidia. Meta is up more than 32% in 2024, and Nvidia is up another 84% this year. Billionaire investor Stanley Druckenmiller also said he cut his big bet on chipmaker Nvidia earlier this year, adding that the meteoric AI boom may be overvalued in the short term. Gerstner noted that the macro environment has become less ideal for investors. First, the Federal Reserve is now expected to continue to hold off on cutting rates to combat persistent inflation. In addition, corporate tax rates could rise as the 2017 cuts expire, Gerstner said. “We started the year expecting six rate cuts. Now we may have cut rates to zero,” he said. “We have an election coming up, and there is a possibility that the corporate tax rate cuts from 2017 … will expire at the end of 2025 unless extended, and that represents a significant portion of the gains in the S&P 500.” In trimming his positions this year, Gerstner, a Harvard Business School graduate, explained that over the long term he wants to invest in some of his largest assets. “We want to be in companies like Nvidia that are gaining momentum again, companies like Amazon, Google, Microsoft and Snowflake that we think are accelerating their growth again. I’m going to work,” he said.
