Alphabet Sells Stake in Two Top AI Stocks

September 17, 2024 02:30 AM PDT | By Team Kalkine Media

Alphabet Sells Stake in Two Top AI Stocks — Image source: Shutterstock

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Five weeks ago, one of the most anticipated data releases of the third quarter occurred: the Form 13F filings from institutional investors. These filings, submitted within 45 calendar days after a quarter ends, provide a detailed overview of the stock transactions conducted by major financial institutions with assets exceeding $100 millionDespite being up to 45 days old, these reports offer valuable insights into the investment strategies and focus areas of prominent money managers.

Among the notable filers is Alphabet Inc(GOOGL), which manages nearly $2 billion across 42 stocksAlphabet, renowned for its dominant position in search engine services through Google, also holds significant stakes in various companies, including key positions in GitLab and Arm Holdings.

However, recent 13F filings have drawn attention to Alphabet’s strategic decisions regarding its artificial intelligence (AI) investmentsThe company has been reducing its holdings in two prominent AI stocks: CrowdStrike Holdings and DexCom.

CrowdStrike Holdings, (NASDAQ:CRWD) a cybersecurity firm, has seen Alphabet reduce its stake significantly over two consecutive quartersAfter trimming its position by a third in the March-ended quarter, Alphabet further decreased its holding by 50% in the June-ended quarterThis reduction likely stems from CrowdStrike's high valuation, despite its strong performance and a recent operational issue that led to service downtime.

DexCom, a leader in continuous glucose monitoring systems, has also experienced a decrease in Alphabet’s investmentAlphabet cut its stake by over 51% in the first quarter and by an additional 42% in the second quarterThis decision follows DexCom’s challenges, including disappointing sales guidance and issues related to its sales strategy and competition from new diabetes treatments.

Both companies remain influential in their respective fields, but Alphabet's adjustments reflect a broader strategy to manage high valuations and adapt to emerging market dynamicsThese changes in Alphabet’s investment portfolio underscore the evolving nature of AI and technology investments.

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