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

Benzinga · 11/15/2022 15:20

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