Hedge Fund Moves: Apple Sold While Tesla Grows

Hedge fund billionaires are selling Apple while increasing stakes in Tesla. Are these moves a sign for individual investors? An analysis reveals potential implications for stock prices and investor sentiment.

Date: 01-04-2025

AI Rating: 5

Changing Fortunes for Apple and Tesla

Recent trades from prominent hedge fund billionaires reveal a significant shift in sentiment towards Apple and Tesla. Notably, hedge fund managers including Izzy Englander, Dan Loeb, and David Shaw have reduced their exposure to Apple while significantly increasing their positions in Tesla. This trend, which indicates a lack of confidence in Apple's current prospects compared to Tesla, could have meaningful implications for both stocks.

Apple Analysis

Apple's performance reflects mixed results with a 4% increase in total revenue, primarily driven by services, while iPhone sales declined by 1%. More concerning is that net income improved primarily due to stock buybacks rather than organic growth. GAAP earnings per share increased to $2.40, supported by share repurchases, which raises questions about sustainable growth. Analysts predict earnings growth of 8% over the next year, making Apple’s current P/E ratio of 31 times earnings appear expensive. Therefore, the outlook for Apple seems cautious as the stock has experienced significant insider selling.

Tesla Analysis

On the other hand, Tesla's recent performance has been underwhelming, with a 2% revenue increase alongside market share losses and a decline in operating margins. Non-GAAP earnings of $0.73 per diluted share indicate minor profitability in a challenging environment. The anticipated introduction of affordable models and robotaxis may improve Tesla's outlook; however, analysts have decreased earnings growth estimates to 22%, down from 29%. This could signal more volatility for Tesla stock, especially if earnings do not meet revised expectations.

Overall, while hedge funds are moving from Apple to Tesla, the mixed performance metrics and uncertain future for both companies suggest a volatile outlook for investors. Apple’s challenges may suppress its stock price while Tesla’s growth ambitions create both risks and opportunities. Careful consideration is warranted as individual investors evaluate these trends.

Stocks: AAPL TSLA