Remember when Tesla was the darling of every hedge fund manager’s portfolio? Well, guess what – Elon’s electric empire is officially back in the VIP section, and the smart money crowd is absolutely loving it.
According to a fresh Goldman Sachs analysis that’s basically the financial equivalent of a high school yearbook superlatives list, Tesla has rejoined the ranks of hedge fund favorites for the first time since 2022. And honestly? It’s about time.
Here’s the tea: Goldman’s “hedge fund VIP list” – which sounds way cooler than it actually is – tracks the stocks that show up most frequently in hedge funds’ top 10 holdings. Think of it as the popular kids’ table, but with more spreadsheets and fewer lunch trays.
The VIP list has been absolutely crushing it this year, returning 15% compared to the S&P 500’s respectable but not-quite-as-impressive 11%. Even the equal-weight S&P 500 is trailing behind at 7%. Turns out, following the smart money actually works sometimes – who knew?
Tesla landed at number 30 on this exclusive list, appearing in 17 hedge funds’ top holdings. Sure, it’s not the #1 spot (that honor goes to Amazon, because of course it does), but hey, Tesla’s stock has been through more ups and downs than a Six Flags roller coaster lately. The fact that it’s back on the list at all is pretty impressive.
The top of the list reads like a “Who’s Who” of tech royalty: Amazon, Microsoft, Meta, Nvidia, Alphabet – basically every company your parents ask you to explain at Thanksgiving dinner. But here’s what’s interesting: every sector except real estate is represented. These hedge fund managers aren’t just throwing darts at a tech stock dartboard (though sometimes it feels like it).
What makes this particularly juicy is that hedge funds have historically been underweight on tech by nearly 15 percentage points compared to the S&P 500. As one analyst put it, their increased tech exposure was “driven more by the sector’s expanding share of the index than by a deliberate overweight.” Translation: they’re not necessarily betting big on tech; tech just got so massive they couldn’t ignore it anymore.
The second quarter was apparently less about finding the next big thing and more about “surviving and returning to old winners.” Bruno Schneller from Erlen Capital Management basically called it a momentum-driven market where “genuine conviction remains scarce.” Ouch, but probably accurate.
Some fun hedge fund moves: Point72 came crawling back to Amazon and Nvidia after dumping them in Q1 (classic ex-relationship energy), while Bridgewater also re-entered Nvidia. Millennium decided to give Bitcoin another shot, and Citadel almost completely bailed on Charles Schwab and the QQQ ETF.
The bottom line? Tesla’s return to hedge fund darling status might signal that the EV pioneer has weathered its recent storms. Whether this translates to sustained stock performance remains to be seen, but at least Tesla’s sitting at the cool kids’ table again. And in the world of institutional investing, sometimes that’s half the battle.