How Much Saudi Arabia's Sovereign Wealth Fund Is Spending To Buy The Dip In Amazon, Alphabet And Meta

Zinger Key Points
  • The fund currently owns approximately $40 billion in U.S. assets, out of a total value of $620 billion.
  • Since January, Amazon is down 42%, while Facebook’s parent company Meta is down 65%.

The Saudi Arabian sovereign wealth fund has purchased $7 billion worth of shares in U.S. tech companies including Inc AMZN, Alphabet Inc GOOG, Meta Platforms Inc META, PayPal Holdings Inc PYPL and Electronic Arts Inc EA as well as shares from financial institutions BlackRock Inc BLK and JPMorgan Chase & Co JPM.

The Public Investment Fund, as it’s officially referred to, was created in 1971 with the goal of reinvesting Saudi Arabia’s oil money into a diversified source of revenue for the country.

The fund currently owns approximately $40 billion in U.S. assets, out of a total value of $620 billion, according to Bloomberg.

The Public Investment Fund’s decision to double down on investment in the tech sector comes at a time when tech stocks are struggling. 

Invesco’s QQQ ETF QQQ, tracking 100 of the largest and most innovative non-financial companies listed on the Nasdaq, is down 28% this year, underperforming the S&P 500 by more than 10%. 

The more tech-focused Vanguard Information Technology ETF VGT is down a similar 26% since January.

Flagship big tech companies have performed even worse this year. Since January, Amazon is down 42%, Facebook’s parent company Meta is down 65% and Class A shares from Google’s parent company Alphabet are down 32%.

The fund also maintained shares in multiple other American companies including Starbucks, Microsoft, Live Nation, PayPal, Home Depot, Walmart, Visa and Adobe.

Benzinga’s Take: The PIF’s decision to “buy the dip” on U.S. tech companies can be seen as taking a long-term outlook on the sector. While the fund’s strategy is not made public, it’s understandable to deduce that increasing its stake in the sector comes with a belief that these companies will recover in due time.

Photo by Hala AlGhanim on Unsplash

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Posted In: NewsPoliticsMarketsGeneralPublic Investment FundSaudi Arabia Sovereign Wealth Fund
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