Arrowstreet Capital Limited Partnership 13F Portfolio

The biggest adds by dollars are not speculative moonshots; they’re the operating systems of global consumer and enterprise spend. Arrowstreet lifted Apple by 53.7% (up about $3.02B), Amazon by 23.8% (about $1.85B), and Microsoft by 14.0% (about $1.27B), all sitting on healthy gains versus cost. That signals a simple view: the cleanest way to own AI and cloud isn’t more GPUs, it’s the platforms that will tax every incremental compute dollar.

Below the household names, the aggression is just as clear:

• Palantir: share count almost doubled, up 96.4% with roughly $1.17B more at work, even though it’s only 1.06% of the book. That is a high‑beta sidecar on data‑driven defense and government AI.
• ARM and TSM: ARM is up 333.2% in shares (about +$1.12B), TSM up 145.8% (+$798.3M). They’re rotating from over‑owned packaged winners into the architecture and manufacturing choke points.
• Comcast and Lumentum: CMCSA shares up 322.9% (about +$980.5M), Lumentum up 238.5% (+$828.6M). That’s a bandwidth and optical capacity bet: AI workloads still have to cross a very physical network.
• Financials ballast: Wells Fargo (+459.2%), Progressive (+128.7%), AON (+227.9%), and Chubb (+88.5%) all see big size-ups. They’re building a rate‑resilient earnings spine around a still tech‑heavy core.
• Health care build‑out: Medtronic (+176.7%), Stryker (+111.0%), Boston Scientific (+67.7%), Abbott (+97.3%), ISRG (+77.8%). These are not momentum chases; several sit below cost, which looks like valuation‑driven accumulation.

The funding list is telling: Arrowstreet is cashing in on the most extended pieces of the semi-cap and gold trade, not abandoning the AI story. Broadcom was cut by 54.1% (about -$3.83B), KLA by 40.4% (-$965.6M), Lam Research by 6.9% (-$394.6M), and ASML by 10.8% (-$353.4M). All are deep in the green versus cost, especially Lam and KLA with gains above 100%, which looks like disciplined profit‑taking rather than a structural short on semis.

Alphabet is a more subtle signal. Across GOOGL and GOOG, they trimmed modestly (down 12.1% and 1.7%, together more than -$800M). Alphabet is still a core holding, but relative to the big adds in Microsoft and Amazon, Arrowstreet is re‑ranking who wins incremental AI ad and cloud dollars.

On the true de‑risking side, Barrick Gold was cut by 27.5% (about -$479.0M) despite being up more than 100% versus cost. That looks like a conscious reduction in pure macro hedge now that the book has other defensives. Disney and Booking were also reduced (Disney -22.0%, Booking -19.5%), consistent with dialing back consumer cyclicality in favor of higher‑visibility cash flows in McDonald’s and TJX, both of which were increased.

Headline tech still dominates at 61.22% of the disclosed book, but that’s down from an estimated 66.93%. The cuts came from the frothiest corners: semicap equipment and Broadcom in particular, plus a small step down in Alphabet. What’s left is more concentrated in megacap software, hyperscalers, and selective semiconductor bottlenecks like ARM and TSM.

The real story is in what grew around that tech core:

• Health care climbed from 6.76% to 8.61% on the back of large additions across devices (SYK, BSX, MDT), services (HCA, MCK), and big pharma (AZN, ABT). Arrowstreet is clearly building a secular, policy‑buffered growth sleeve.
• Telecommunications, broadly understood as networking and bandwidth, jumped from 4.24% to 6.13%, between Cisco, Arista, Comcast, Lumentum, T‑Mobile, and Ciena. This is the physical rails of AI and streaming demand.
• Financials nearly doubled, from 2.93% to 4.99%. Progressive, Wells Fargo, Bank of America, AON, and Chubb together look like a deliberate balance‑sheet hedge against equity multiple compression.

Basic materials slipped (1.95% from 2.52%) as Barrick was cut, while energy edged down slightly despite a small add to Suncor. In other words, macro hedges and commodity beta are being deemphasized in favor of idiosyncratic, cash‑compounder defensives.

Taken together, this quarter says Arrowstreet wants sustained exposure to AI and digitalization, but not on venture‑style terms. Their core bet is that megacap platforms and infrastructure will keep compounding, while health care and financials smooth the ride. They’re less interested in owning every incremental dollar of semiconductor capex and more interested in owning the toll‑booths and bandwidth.

The adds to Palantir, ARM, TSM, and optical names show they still want upside if AI intensity surprises to the upside. But the simultaneous build in devices, hospitals, insurers, and banks suggests they’re underwriting a world where rates stay non‑zero and cyclicality matters. That’s a classic institutional posture: stay long the structural theme, shorten the drawdowns.

Going forward, watch whether they continue to bleed down the older AI winners like Broadcom and the semicap complex in favor of networking and software, and whether health care creeps into double‑digit weight. If their 3‑year record near 22.0% annualized is any guide, Arrowstreet is comfortable trading around winners to keep factor and sector risk in check while riding the same underlying trend.