Caisse de Depot et Placement du Quebec, Canada’s second-largest public pension, posted a negative annual return in 2022, the first time since the financial crisis.
But the pension did beat the market. CDPQ, as the provincial pension is known, saw a negative 5.6% return last year, compared with a 19% drop in the S&P 500 index. At the end of 2022, it managed $295 billion in assets.
One of CDPQ’s actions in the last quarter of 2022 was to cut positions in a few chip companies by 20% or more, including Advanced Micro Devices(ticker: AMD), Intel(INTC), Nvidia(NVDA), and Micron Technology(MU). Three of those stocks have been surging so far in 2023. The pension disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
CDPQ declined to comment on the sales of the chip stocks.
AMD stock dropped 55% in 2022, and so far this year shares are up 26% compared with a 5.4% rise in the S&P 500. CDPQ sold 231,336 AMD shares in the fourth quarter to cut its investment to 442,429 shares.
AMD reported strong earnings in 2022, but shares were pressured by weakening demand in PCs, which use its chips. However, this year, progress in data centers and the increasing vulnerability of rival Intel are lifting AMD stock.
Intel announced a 66% dividend cut in late February. Barron’s thinks it’s “a positive sign management is acknowledging the chip maker’s precarious situation.” Intel CEO Pat Gelsinger has been a buyer of shares this year, both before and after the announcement of the dividend cut.
CDPQ sold 1.4 million Intel shares in the fourth quarter to end the period with 5.5 million shares. Intel stock fell 49% in 2022, and so far this year shares are flat.
The pension sold 512,139 Nvidia shares to end the fourth quarter with 1.4 million shares. Nvidia stock dropped 50% in 2022, and so far in 2023 shares have surged 63%.
Nvidia stock has been supported by an investor craze for plays on artificial intelligence. One shareholder who has benefited from the surge in shares is Nvidia CEO Jensen Huang, who has curbed his once-substantial stock sales. The company says a recovery in its video game-related business would be another catalyst.
Memory-chip maker Micron looks less game after its chief financial officer warned earlier in March of a weak outlook for the current quarter. The previous month, Microncut executives’ salaries and suspended bonuses. Meanwhile, memory-chip prices are expected to keep falling in the first half of this year.
Micron stock tumbled 46% in 2022, and so far this year shares are up 14%. CDPQ sold 1.1 million Micron shares to end the fourth quarter with 2.9 million shares.