Billionaire Investors Are Dumping Apple to Buy This Stock Instead

Where last year was another remarkable performance for the stock market with all the major indices posting double-digit gains, 2025 is shaping up differently. Fear, uncertainty, and doubt — FUD — seems to have crept into stocks as global trade tensions and economic risk rise.

Because inflation reigniting is a concern, consumer discretionary stocks are tumbling hard, but technology stocks are also wobbling with the sector down 12% year-to-date. Apple (NASDAQ:AAPL), as the biggest, most valuable company with a market capitalization of more than $3.3 trillion, is also bearing the brunt. Its stock is down 10% so far this year.

Billionaire investors on Wall Street are dumping their stakes in the tech giant. Fund manager Andreas Halvorsen at Viking Global Investors completely sold off his position in AAPL stock in the fourth quarter, all 4.86 million shares at an average price of $241.71 per share. That is $1.17 billion worth of stock, but he isn’t alone. 

Terry Smith at Fundsmith also shed his Apple holdings, some 1.56 million shares, as did Third Point’s Daniel Loeb, who sold 930,000 shares. Loeb had also sold a million shares in the prior quarter, too.

The reason seems clear. Apple’s growth has slowed, with fiscal first-quarter iPhone sales dipping 1% to $69.14 billion amid weak China demand. Its AI rollout, Apple Intelligence, lags behind competitors while delaying features like an advanced Siri until 2026. 

Don’t count Apple out, of course. Some analysts are still expecting a new smartphone “supercycle” to sweep iPhone sales higher, and a new cheaper iPhone could help spark new interest in China. Apple’s services business also continues to chug along, providing confidence that AAPL will be a long-term winner for investors.

Still, despite the decline in AAPL stock, shares trade at a lofty P/E of 36, well ahead of its five year average of 28. Apple’s valuation looks stretched against modest 10% earnings growth forecasts. These billionaire investors see better opportunities elsewhere as tariffs and inflation reshape tech prospects.

A tech stock still growing

One stock hedge fund managers are turning to is streaming audio leader Spotify (NYSE:SPOT), where institutional investors like BlackRock (NYSE:BLK) and State Street (NYSE:STT) are gobbling up millions of shares. Yet others like Jennison Associates acquired $1.3 billion worth of SPOT stock and Chase Coleman at Tiger Management Fund bought another $564 million worth.

Spotify’s breakout performance and strategic positioning in a shifting market is attracting buyers. 

Last year was stellar for the streaming audio service. Shares soared 141%, fueled by a 12% rise in monthly active users to 675 million and an 11% jump in subscribers to 263 million. This growth, paired with its first full year of profitability, indicates Spotify is a maturing business ready to reward investors. It is continuing over into 2025 with SPOT stock up 26% year-to-date.

One draw is Spotify’s AI-driven edge. Its investments in personalized playlists and ad tools have boosted engagement and monetization, with Q1 2025 revenue projected at $4.56 billion, ahead of estimates. 

This aligns with the  broader tech trend of AI as a growth engine. It is an appealing message for money managers who are betting on innovation over hype. Unlike Apple, where funds are trimming stakes due to sluggish sales, Spotify’s low-cost, scalable model offers resilience amid inflation and tariff jitters, factors it is largely immune from.

Tech growth at a discount

The stock’s valuation is also tempting. It trades at an enterprise value-to-sales of 1.9, far below its five-year average of 3.5, with a P/S ratio that’s similarly discounted.

Hedge funds thrive on such gaps, and Spotify’s 66% institutional ownership reflects confidence. Managers likely see long-term value in its 600 million-plus user base and podcast expansion.

Risk-tolerant billionaires might also view Spotify as a counterweight to tariff-hit sectors. Its global footprint is less tied to physical goods and shields it from any trade war fallout, unlike manufacturing-heavy firms. 

While risks like competition from YouTube or a market downturn linger, Spotify’s fundamentals suggest billionaire investors are making a calculated bet on the streaming giant hitting its stride.

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