Citigroup transforms into "Tech Stock Hunter": Q1 increases holdings in Microsoft and Nvidia, significantly increases stake in AMD

According to the disclosure by the U.S. Securities and Exchange Commission (SEC), Citigroup Inc. submitted its first-quarter U.S. stock holding report (13F) as of March 31, 2024.

The statistical data shows that Citigroup's total market value of holdings in the first quarter reached approximately $152 billion, compared to around $142 billion in the previous quarter, representing a quarter-on-quarter growth of about 7%. The data indicates that Citigroup added 345 individual stocks to its portfolio in the first quarter and increased its holdings in 3,120 individual stocks. At the same time, the institution reduced its holdings in 1,644 individual stocks and cleared out 410 individual stocks. Among them, the top ten holdings accounted for 23.82% of Citigroup's total U.S. stock market value, reflecting a relatively high total weight of Citigroup's top ten holdings.

In the top ten heavy-weight holdings of Citigroup in the first quarter, most were increased by Citigroup, and those increased by Citigroup are all major U.S. tech giants. Among them, Microsoft (MSFT.US), Nvidia (NVDA.US), and Apple (AAPL.US) received significant increases from Citigroup, with Nvidia, the absolute leader in the AI chip field, receiving an increase of nearly 18% from Citigroup, while Microsoft and Apple both saw increases of over 10%. The changes in Citigroup's top ten holdings indicate that the Wall Street giant, which has long focused on index ETFs, is rarely chasing after global stock market hotspots. The institution is now chasing the investment frenzy around AI that has been dominating the global stock market since 2023.

Specifically, the Nasdaq 100 Index ETF put options (QQQ.US, PUT) ranked as Citigroup's largest holding, with approximately 15.53 million shares held, a market value of around $6.9 billion, accounting for 4.53% of the investment portfolio, a significant decrease of 29.34% from the previous quarter.

The Russell 2000 Index ETF put options (IWM.US, PUT) ranked as Citigroup's second largest holding, with approximately 31.28 million shares held, a market value of around $6.6 billion, accounting for 4.32% of the investment portfolio, a decrease of 5.06% from the previous quarter.

The Nasdaq 100 Index ETF call options (QQQ.US, CALL) ranked as the third largest holding, with approximately 10.67 million shares held, a market value of around $4.7 billion, accounting for 3.11% of the investment portfolio, a decrease of 8.90% from the previous quarter.

Microsoft (MSFT.US) ranked fourth, with approximately 8.52 million shares held, a market value of around $3.6 billion, accounting for 2.35% of the investment portfolio, an increase of 16.99% in holdings compared to the previous quarterNVIDIA (NVDA.US) ranks fifth in terms of holdings, with approximately 3.9 million shares, a holding market value of around 3.5 billion US dollars, accounting for 2.31% of the investment portfolio, and an increase in holdings by 17.52% compared to the previous quarter.

Among the top ten heavily weighted stocks, the targets ranked 6-10 are: Apple (AAPL.US), Russell 2000 Index ETF Call Options (IWM.US, CALL), Amazon (AMZN.US), S&P 500 Index ETF Put Options (SPY.US, PUT), and High-Yield Corporate Bond ETF Put Options (HYG.US, PUT). Except for the technology giants Apple and Amazon, which received increased holdings from Citigroup, the other targets were significantly reduced, with the reduction in High-Yield Corporate Bond ETF Put Options reaching nearly 47%.

It is worth noting that while Citigroup significantly reduced its holdings of index ETF put options in the first quarter, it also continued to reduce its holdings of index ETF call options, a strategy known as a "sell straddle strategy." This strategy reflects investors' expectations for future stock prices, indicating that they believe stock prices will not fluctuate significantly before the options expire, or will remain relatively stable within a certain range. This strategy is typically used when market volatility is low, and if stock prices fluctuate significantly, whether up or down, the sell straddle strategy could lead to significant losses.

Citigroup's increased positions in Microsoft, NVIDIA, Apple, and Amazon in the first quarter have yielded substantial returns, with the stock prices of these tech giants all rising in the first quarter except for Apple. Notably, driven by unparalleled strong performance, NVIDIA's stock price surged by an astonishing 80% in the first quarter, with the latest performance proving NVIDIA's undisputed position as the "strongest shovel seller" in the global AI field. Leveraging its 90% market share in the AI chip field and the globally preferred software-hardware collaborative system in high-performance computing areas such as AI training/inference—CUDA computing platform, NVIDIA is capitalizing on the unprecedented global trend of enterprise AI deployment. Citigroup has set a 12-month target price for NVIDIA as high as $1030 in a research report, implying a potential upside of about 13% for NVIDIA's stock price.

Relying on its status as a major shareholder of OpenAI, Microsoft has embedded the pride of OpenAI, the GPT-4 AI large model, into its flagship applications such as the Office suite and the Microsoft Azure cloud platform, establishing itself as the absolute leader in AI application end markets globally, with performance and stock prices continuously growing since 2023Microsoft's stock performance in the first quarter was also very impressive, with an increase of nearly 15%, and a market value of up to $3 trillion. Microsoft's market value has surpassed Apple comprehensively, becoming the "new stock king" globally.

In terms of changes in holdings, Citigroup's top five purchases in the first quarter were: Nvidia, Microsoft, bullish options on Emerging Markets ETF (EEM.US, CALL), bullish options on Nvidia, and bearish options on Nvidia. It is worth noting that Citigroup not only significantly increased its holdings in Nvidia, but also bought bullish and bearish options on Nvidia, seeking to profit from the rise in stock price and provide downside hedging when Nvidia's stock price falls.

In addition, most tech stocks saw Citigroup increasing its holdings, with Tesla (TSLA.US) receiving a 14% increase in holdings in the first quarter, while Google (GOOGL.US), Broadcom (AVGO.US), and Meta (META.US) also saw slight increases. Nvidia's biggest competitor in the PC and AI chip sector, AMD (AMD.US), received a 48% increase in holdings from Citigroup, rising to 27th place in terms of position in the first quarter. Qualcomm (QCOM.US), currently focusing on the AI PC market and a leader in smartphone chip sector, also saw a significant increase in holdings from Citigroup in the first quarter, with a substantial increase of about 66%, rising to 36th place in terms of position.

Citigroup's top five sales targets in the first quarter were: bearish options on Nasdaq 100 Index ETF, bearish options on High Yield Corporate Bond ETF, bearish options on S&P 500 Index ETF, bullish options on Russell 2000 Index ETF, and bullish options on S&P 500 Index ETF