US Stock Market Trends & Portfolio Strategies: Navigating AI, Semiconductors, and Growth

🔎 Major Institutional Trading Trends

Recently, major U.S. institutions have been accumulating large positions in the "Magnificent 7" tech stocks. Their strategy shows a clear focus on growth recovery potential rather than concerns over a recession.

 

🔥 Legendary Investors' Strategies

1️⃣ Stanley Druckenmiller

• With an average annual return of 30%, Druckenmiller is strongly committed to Bio + AI beneficiary stocks.
• He is focusing on names like INSM, TEVA, LLY, TSM, FLUT and is expanding his holdings in technology platform stocks such as TSMC (Taiwan Semiconductor Manufacturing Company).
• His biggest regret? Selling all of his NVIDIA shares in 2024. This reflects his strong confidence in the semiconductor and AI infrastructure sectors.

---

2️⃣ Renaissance Technologies

• With a 1-year return of 21% and a 5-year return of 74%, Renaissance Technologies has aggressively increased its stake in HOOD (Robinhood).
• They reduced their position in PLTR (Palantir) and took new positions in Broadcom (AVGO), betting on the growth of AI semiconductor infrastructure.
• Notably, biotech and defensive stocks were sold off at profit-taking levels, while AI infrastructure and next-generation consumer platforms were heavily accumulated.

---

3️⃣ Baillie Gifford

 

• Known for its long-term growth investment strategy, Baillie Gifford's average buy prices for Amazon ($24), NVIDIA ($4.7), and Tesla ($13.8) show their strong commitment to growth stocks.
• However, they took profits on stocks with overvalued valuations and expanded their positions in emerging markets and fintech.
• They no longer solely focus on massive platforms like Tesla and Amazon, instead shifting towards data, AI, and cloud infrastructure—a more segmented tech trend.

---

4️⃣ Michael Burry

• The investor who predicted the Lehman Brothers collapse in 2008 maintains a 100% long position in Estee Lauder.
• Conversely, he is highly skeptical of the AI tech bubble and warned of overvaluation in NVIDIA and Chinese stocks.
• He expects short-term declines in tech and Chinese stocks, while viewing undervalued consumer stocks as opportunities.

---

📉 U.S. Credit Rating Downgrade

Moody's recently downgraded the U.S. credit rating from AAA to Aa1.

• The main reason is the rising debt burden and declining repayment capacity.
• Despite this, the U.S. remains the world's largest economy with the global reserve currency (USD), making its Treasuries still attractive.

---

📊 S&P500 Index Analysis

The S&P500 index surged to 5,900pt following the U.S.-China negotiations on May 12.

• 5,720pt reached → Consider investing 10% to 20% of planned purchase amount
• 5,800pt reached → Consider investing 30% to 40% of planned purchase amount
• Before 5,900pt → Take profits and prepare for a market correction

The current index level seems somewhat stretched.

• Just as legendary investors aggressively took profits,
• It's a good time to sell 30% to 40% of ETF or individual stocks with considerable gains.
• At the 6,000pt ~ 6,200pt range, more cautious judgment is needed.

---

💡 Portfolio Strategy Suggestions

1️⃣ AI Infrastructure & Semiconductors

• Maintain exposure to NVIDIA, AMD, TSM and other key players in AI and semiconductors.
• Partial profit-taking is recommended if the index reaches 5,800pt or higher.

2️⃣ Emerging Markets & Fintech

• Gradually increase allocations to emerging market ETFs like EEM, VEA and fintech stocks.

3️⃣ Reduce Defensive Stocks, Strengthen Growth Stocks

• Reduce positions in consumer staples and defensive stocks.
• Rebalance towards technology, biotech, and platform infrastructure.

4️⃣ Optimize Buy Timing

• Use the Fear & Greed Index to monitor market sentiment.
• If extreme greed is detected, consider partial profit-taking.
• At 6,200pt, adjust holdings and prepare for a potential economic slowdown.

---

🔎 Conclusion

The U.S. stock market is shifting focus from recession fears to growth recovery potential.
The main opportunities lie in AI, semiconductors, and emerging market consumption.
However, selective profit-taking in overvalued tech stocks and expanding exposure to emerging markets and fintech seem prudent.

→ Now is the time to bet on growth but remain cautious with strategic, staged investment.