The Smartest Money on Earth Sold $8B in Microsoft and Cut Nvidia 93% in Q1

• Q1 13F filings show Berkshire cut from 40 to 26 positions, Hohn sold $8B in Microsoft, Ackman exited Google, and Loeb cut Nvidia by 93%
• Ray Dalio’s bubble indicator reads 80% of the extremes seen before the 1929 crash and the 2000 dotcom bust, using his proprietary decades-long model
• Bill Gates also sold 100% of his Microsoft stake while the Gates Foundation dumped 7.7 million MSFT shares as the stock sits down 15% YTD

The latest hedge fund filings showed several well-known investors reducing exposure to major AI and technology stocks during the first quarter. This is even as the overall market rally continued. The filings renewed discussions around a possible stock market bubble. This came to light after Bridgewater founder Ray Dalio warned that market conditions are approaching levels seen before previous major corrections. Nvidia stock, Microsoft, and Alphabet were among the companies that saw notable portfolio changes from large hedge funds during the quarter.

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What Buffett, Hohn, Ackman, and Loeb’s Q1 Filings Say About the AI Bubble

Chris Hohn’s TCI Fund reduced most of its Microsoft position during the first quarter. They cut the holding from around 10% of the portfolio to roughly 1%, according to regulatory filings and investor reports. Reports said the move reflected concerns that artificial intelligence could eventually pressure Microsoft’s software and cloud business.

Daniel Loeb’s Third Point also exited Microsoft. They reduced Nvidia stock exposure by more than 93% during the quarter. Bill Ackman’s Pershing Square took a different position by building a new Microsoft stake while largely exiting Alphabet. Ackman later said investors were not fully recognizing Microsoft’s long-term position in AI infrastructure and enterprise software.

Lastly, Berkshire Hathaway also reduced the number of holdings in its portfolio during the quarter. They trimmed exposure across several positions.

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Ray Dalio Says Market Conditions Resemble Previous Bubbles

Ray Dalio recently said his market bubble indicator shows conditions are around “80%” of the levels seen before the 1929 crash and the 2000 dot-com bubble. Dalio said,

“These indicators show that we’re about 80% of where we were in those two historical periods. That doesn’t mean the move is over, because bubbles have to be pricked.”

The Bridgewater founder pointed to concentration around a small number of AI-related companies as one of the key risks in the current market environment. He also said leverage and speculative positioning have continued building as AI-linked stocks dominate market performance. Dalio also said bubbles usually form when wealth creation starts outpacing available cash in the market. He added,

“Bubbles don’t happen because of good estimates of the future — they happen because of the need for cash.”

At the same time, investors remain divided on whether current valuations are justified by earnings growth and long-term AI demand.

According to reports, Microsoft currently trades below its five-year median valuation multiple. This is despite continued spending on AI infrastructure and cloud services.

The latest hedge fund Q1 2026 filings suggest that several large investors are becoming more selective within the AI trade. They seem to be cautious about increasing exposure across the sector.

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