Two Sigma Investments 13F Portfolio

The biggest dollar adds show Two Sigma aggressively buying the financial plumbing of markets and the more durable edges of AI and digitization. Rather than chase another leg in AI leaders, they are using those gains to scale into transaction rails, brokers, and tax-and-accounting software.

On the financial side, they made outsized commitments to large, diversified balance sheets and trading platforms:

• Wells Fargo: WFC is up 359.0% in shares, adding about $469.6M, turning a residual line into a real call on US consumer and commercial credit normalization.
• Goldman Sachs: GS is up 106.0%, with roughly $392.2M added, a bet that capital markets and fee income remain structurally strong rather than cyclical peaks.
• CME Group: CME is up 110.2%, a ~$280.2M add that monetizes volatility and volume rather than directional rate calls.
• Charles Schwab and Citigroup: SCHW is up 57.2% and C up 38.0%, signaling comfort with regulated deposit/gateway franchises after the 2023-24 regional bank scare.

In health care, they are pressing into high‑quality, procedure-driven growth:

• Boston Scientific and Intuitive Surgical: BSX is up 105.7% and ISRG 40.8%, with BSX alone getting about $424.6M of new capital despite being roughly -22.1% versus their cost basis, suggesting they see underappreciated volume and mix growth.
• Cigna: CI explodes 182.7% higher in shares (~$323.0M add), an explicit wager on managed care cash flows and pricing power.

Technology conviction has not disappeared; it has migrated. The single new position is Intuit (INTU), a ~$564.2M starter that immediately lands in the top quartile of the book, and Microsoft (MSFT) sees a 32.5% add. That is a clear preference for software franchises that sit on tax, accounting, and productivity data, rather than another dollar of AI GPU beta.

On the sell side, the story is ruthless profit-taking in the most crowded AI and high-beta winners. Two Sigma is not expressing a doom call on AI; they are acknowledging that the easy money has been made in the obvious names and recycling capital into less-loved cash-flow engines.

The most telling trims:

• Micron: MU is slashed -76.6% in shares, freeing an estimated $2.03B. With the position still showing a +340.4% gain vs cost, this looks like a classic "take the chips off the DRAM table" move.
• SanDisk: SNDK is cut by -68.3%, releasing about $1.18B, after an eye-watering +1013.8% gain vs average cost. That is not nuance; it's a victory lap.
• Nvidia, Alphabet, Apple: NVDA (-44.1%), GOOGL (-49.3%), and AAPL (-29.7%) collectively free roughly $2.28B. They remain meaningful positions, but conviction is clearly cooling at current multiples.

Outside core tech, Bloom Energy (BE) is pared by -43.2% (about $463.5M of capital) despite a +372.0% gain. That suggests a view that speculative energy story stocks have outrun fundamentals. In health care, Moderna (MRNA) and Guardant Health (GH) are each trimmed by double digits, signaling less appetite for binary-ish biotech upside in favor of profitable devices and insurers.

Even strong consumer names are sources of liquidity. Amazon (AMZN) is down -9.8% in shares after solid gains, and off-price retailers like Ross Stores (ROST) and TJX see mid‑single to low‑teens percentage reductions. The pattern is consistent: scale back richly valued, consensus winners to finance larger, less-crowded, cash‑generating exposures.

The sector chart makes the rotation explicit. Technology’s share of the disclosed book falls from 36.34% to 24.45%, while Finance climbs from 14.19% to 18.17%, Health Care from 12.85% to 15.35%, Industrials from 7.64% to 10.13%, and Consumer Discretionary from 15.89% to 17.90%.

Finance is where the biggest structural change sits. Large, diversified banks (JPM, C, WFC), brokers and exchanges (GS, SCHW, IBKR, CME), and an insurer (PGR, even after trims) collectively define a bet that the profit pool in intermediation, trading, and risk transfer grows in a higher‑rate, more volatile world.

Health care exposure is migrating from science projects to operating businesses. Adds in BSX, ISRG, ABT, CI, and IONS push the sector higher even as they trim ALNY, GH, MRNA, and BMY. The portfolio is skewing toward procedure volumes, chronic-care demand, and predictable underwriting margins.

Industrials see a meaningful step-up via defense (LMT, RTX), diversified industrials (ITW), and chemicals (DOW). That basket screams a view that fiscal spend, reshoring, and capex normalization will keep order books full. Energy exposure via Bloom Energy is actually shrinking, reinforcing the idea that they prefer established industrial cash flows over more speculative green narratives.

Consumer exposure is getting more barbelled. They’re leaning further into Costco, Chipotle, T-Mobile, and American Airlines while modestly trimming Amazon and off-price retailers. The net effect is more sensitivity to travel and services recovery and slightly less dependence on e‑commerce upside.

Taken together, the 2026-Q2 moves show a manager that believes the AI story is real but the first phase of equity winners is mature. The book now leans toward the second‑order beneficiaries: financials that monetize volatility and flows, software that taxes the real economy, industrials that supply capex, and health-care platforms that compound volumes.

The adds to Berkshire Hathaway, Mastercard, Equinix, and large banks all rhyme: these are platforms with embedded optionality on rates, risk spreads, and data usage, funded by trimming the most celebrated tech trades. The new Intuit stake and higher Microsoft weight show they still want software leverage to AI, but with a defensive underpinning in recurring revenues and entrenched ecosystems.

On the risk side, they are clearly more comfortable with macro and credit than with duration in long-dated growth narratives. Bigger bets in banks, airlines, chemicals, and defense imply confidence that nominal GDP, travel, and government spend stay constructive. The health-care reallocations point toward a world of aging demographics and pricing power rather than binary drug bets.

For observers, the lesson is not that Two Sigma has "given up on tech"; it is that, at this point in the cycle, they see better risk‑adjusted returns in cash-flow compounding and financial intermediation than in owning one more dollar of AI hardware beta. If the next leg of the market is led by cyclicals, financials, and real-economy cash machines, this quarter’s book sets them up to participate without surrendering the structural tailwinds of software and health care.