Citi Turns into a "Tech Stock Hunter": Boosts MSFT, NVDA, and Makes a Significant AMD Addition in Q1

Among $Citigroup(C.US)$ 's top 10 holdings in the first quarter, most saw significant increases, with all being major U.S. tech giants. $Microsoft(MSFT.US)$ , $NVIDIA(NVDA.US)$ , and $Apple(AAPL.US)$ witnessed substantial boosts, with NVIDIA, the undisputed leader in AI chips, enjoying a nearly 18% increase. Microsoft and Apple also saw over 10% gains. This shift in Citi's holdings indicates the Wall Street giant, which traditionally focuses on index ETFs, is following the global AI investment trend that has been prevalent since 2023.

Specifically, the Nasdaq-100 Index ETF put option ( $Invesco QQQ Trust(QQQ.US)$ , PUT) was Citi's largest holding, with around 15.53 million shares worth approximately $6.9 billion, accounting for 4.53% of the portfolio. However, this position saw a significant 29.34% reduction compared to the previous quarter.

The Russell 2000 Index ETF put option ( $iShares Russell 2000 ETF(IWM.US)$ , PUT) took the second spot, with 31.28 million shares valued at around $6.6 billion, representing 4.32% of the portfolio. This position saw a 5.06% decrease from the previous quarter.

The Nasdaq-100 Index ETF call option ( $Invesco QQQ Trust(QQQ.US)$ , CALL) came in third, holding 10.67 million shares worth about $4.7 billion, accounting for 3.11% of the portfolio. This holding also saw a 8.90% reduction from the previous quarter.

$Microsoft(MSFT.US)$ ranked fourth, with 8.52 million shares valued at $3.6 billion, accounting for 2.35% of the portfolio. Its position saw a 16.99% increase compared to the previous quarter.

$NVIDIA(NVDA.US)$ NVIDIA (NVDA.US) came in fifth, with a position of about 3.9 million shares, a position with a market capitalization of about $3.5 billion, and a portfolio ratio of 2.31%, an increase of 17.52% in the number of positions from the previous quarter. (Citi gave NVIDIA a 12-month price target of up to $1,030 in a research note, implying a potential upside of about 13% for NVIDIA shares.)

The remaining top 10 holdings included $Apple(AAPL.US)$ , the Russell 2000 Index ETF call option ( $iShares Russell 2000 ETF(IWM.US)$ , CALL), $Amazon(AMZN.US)$ , the S&P 500 Index ETF put option ( $SPDR S&P 500 ETF(SPY.US)$ , PUT), and the high-yield corporate bond ETF put option ( $Ishares Iboxx $ High Yield Corporate Bond Etf(HYG.US)$ , PUT). While Apple and Amazon saw increases, the other holdings experienced significant declines, with the high-yield corporate bond ETF put option seeing a near-47% reduction.

Notably, while significantly reducing its put options on index ETFs, Citi also reduced its call options on index ETFs. This strategy, known as a "short straddle," reflects investors' expectation that stock prices will not fluctuate significantly before the options expire or will remain within a relatively stable range.

Looking at the top five buying targets in Q1, Citi favored NVIDIA, Microsoft, emerging market ETF call options ( $iShares MSCI Emerging Markets ETF(EEM.US)$ , CALL), NVIDIA call options, and NVIDIA put options. The bank not only significantly increased its NVIDIA holdings but also bought both NVIDIA call and put options, aiming to profit from upside gains and providing downside protection if NVIDIA's share price declines.

Additionally, most tech stocks saw boosts from Citi, with $Tesla(TSLA.US)$ enjoying a 14% increase, while $Alphabet-A(GOOGL.US)$ , $Broadcom(AVGO.US)$ , and $Meta Platforms(META.US)$ saw smaller gains. $Advanced Micro Devices(AMD.US)$ , NVIDIA's largest competitor in the PC and AI chip markets, witnessed a whopping 48% increase, rising to the 27th spot in Citi's portfolio. $Qualcomm(QCOM.US)$, a leader in the smartphone chip market that is now fully committed to the AI PC market, also saw a significant 66% increase, moving up to the 36th position.

Citi's top five selling targets in Q1 were the Nasdaq-100 Index ETF put option, the high-yield corporate bond ETF put option, the S&P 500 Index ETF put option, the Russell 2000 Index ETF call option, and the S&P 500 Index ETF call option.