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One of the world’s largest public pensions by assets made major changes in its investments in large-cap tech stocks as 2021 came to a close.
PGGM of Zeist, Netherlands, cut investments in Apple (ticker AAPL), Intel (INTC), and Qualcomm (QCOM) stock in the fourth quarter, and initiated a position in Nvidia (NVDA) stock, according to a form it filed with the Securities and Exchange Commission.
PGGM, which managed $327 billion in assets as of Dec. 31., didn’t comment directly on the stock trades. “PGGM has a passive strategy for listed equities, so we don’t have a specific view on specific companies,” it said in a statement.
The pension sold 1.1 million Apple shares to end 2021 with 3.6 million shares of the iPhone maker. The stock rose 34% in 2021, topping the 27% rise in the S&P 500 index. So far this year, shares are down 3% while the index is down 5.6%.
Near the end of December, Apple’s market capitalization approached $3 trillion, but it didn’t cross that mark until early January. One analyst saw a path for the company’s market cap to hit $4 trillion. Apple reported a strong fiscal first quarter at the end of January. “Demand for Apple products and services is materially outpacing supply and when the supply chain normalizes then Apple’s sales and margins will only accelerate higher, in our view,” a Citi analyst noted.
Intel stock hasn’t had the upward trajectory that Apple’s has had. The embattled chip giant saw shares gain 3.4% in 2021; so far this year, shares have dropped 6.8%.
Last year, analysts covering Intel had a skeptical take after the company’s spending climbed under new CEO Patrick Gelsinger, who told us in July the company could “triple, quadruple” in value. Gelsinger was among Intel insiders who bought up stock on the open market in October.
Late last year, though, PGGM was selling Intel stock, shedding 205,000 shares to cut its holdings to 1.3 million shares.
The pension also sold 223,317 Qualcomm shares to end the year with 509,533 shares of the maker of wireless chips and technology. Like Intel, Qualcomm underperformed the S&P 500 in 2021, rising 20% So far this year, Qualcomm shares have dropped 1.9%.
In January, CEO Cristiano Amon told us he was bullish on Qualcomm’s long-term outlook. The company is a play on multiple emerging trends, including connected cars, the metaverse, edge computing, wireless fiber, and next-generation laptops. Earnings, reported last week, were strong, but investors weren’t impressed at first.
Unlike the other two chip makers, Nvidia had a boffo 2021, with shares rocketing 125%. So far this year, Nvidia stock has dropped 17%, one of the more-bruised names as the tech sector was socked in a January market slump.
Particular to Nvidia, the company’s deal to acquire microprocessor design house Arm Holdings from SoftBank Group (SFTBY) now seems to have foundered. Other potential Arm buyers including Intel and Qualcomm don’t look likely to clear regulatory hurdles.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at email@example.com and follow @BarronsEdLin.