Hedge fund giant Coatue Management, run by billionaire investor Philippe Laffont, made a dramatic pivot in the first quarter. According to its latest 13F filing, the fund slashed its Tesla (TSLA) position by roughly 96%, dropping from more than 1.64 million shares at the end of 2025 to fewer than 59,000 shares by March 31.

That's not just a trim — it's basically an exit. And it wasn't the only big-name cut. Coatue also scaled back on several high-profile AI and momentum trades. It cut Nvidia (NVDA) by 31%, reduced Microsoft (MSFT) by more than half, and trimmed Amazon (AMZN) as well.

But here's where it gets interesting: while dumping Tesla, Coatue simultaneously opened new positions in rival EV maker Lucid Group (LCID) and car rental company Hertz Global Holdings (HTZ). That's a swap from one EV bet to another — but Lucid and Hertz are in very different places than Tesla. Lucid is still trying to ramp production, and Hertz is coming out of a rough patch. Both are more speculative, recovery-type plays.

And the theme didn't stop there. Coatue also initiated stakes in a handful of heavily beaten-down names that have become synonymous with meme-stock volatility: Peloton Interactive (PTON), AMC Entertainment (AMC), Beyond Meat (BYND), and Plug Power (PLUG). These are companies that have seen their stocks crushed over the past few years, and they're not exactly the kind of names you'd expect from a fund known for aggressive growth investing.

But Coatue didn't go full contrarian. It also selectively maintained exposure to certain semiconductor and infrastructure plays, opening fresh positions in ASML Holding (ASML), Qualcomm (QCOM), and Equinix (EQIX). So it's not that the fund is fleeing tech entirely — it's more about rotating out of the most crowded trades and into names that could benefit if investor appetite broadens beyond AI leaders.

The Tesla cut, though, is the headline grabber. For a hedge fund that has long been associated with riding momentum in high-growth names, reducing one of Wall Street's most iconic momentum stocks by 96% is a pretty clear signal. It suggests that even some of the biggest institutional investors are getting cautious about how crowded the AI-era trade has become — and that they're looking for value or recovery stories that others have left for dead.

Whether those bets pay off is another question. But for now, Coatue's Q1 moves tell a story of a fund that's willing to make big, contrarian shifts — and that's always worth paying attention to.