Qraft Technologies, a South Korean fintech backed by SoftBank, has significantly increased its investment in Tesla Inc. TSLA. This decision follows a nearly 40% surge in Tesla’s shares in November, despite a less-than-stellar Robotaxi event in October.
What Happened: The fintech firm, which manages approximately $50 million across three ETFs, utilizes AI-driven strategies to rebalance its portfolio monthly. Its largest ETF, AMOM, which employs a momentum-factor investing strategy, raised its Tesla holdings from 6.55% to 7.95% in December. This strategy focuses on stocks with strong past performances, betting on their continued growth, Barron’s reported on Monday.
AMOM’s strategy seems to align with recent political developments, as CEO Elon Musk is expected to co-lead a government cost-cutting initiative under Donald Trump’s anticipated administration. The fund has also adjusted its portfolio to include other “Trump trades” such as financials, energy, and utilities.
These adjustments include new positions in Blackstone Inc. BX, KKR & Co. KKR, Texas Pacific Land Corp. TPL, and Vistra Corp VST. As of November’s end, AMOM returned 38% in 2024, slightly outperforming the iShares US Momentum ETF. Meanwhile, Qraft’s QRFT fund, which employs a defensive strategy, matched the S&P 500’s 26% rise.
Why It Matters: Recently, Tesla’s stock hit $400 in overnight trading on Robinhood, prompting CEO Elon Musk to mock short sellers. This reflects the volatile nature of Tesla’s stock and the confidence investors have in its potential growth.
Meanwhile, the anticipated policies of the Trump administration, such as tax cuts and deregulation, are expected to benefit sectors like energy, oil, and gas. According to Yogesh Kansal, chief business officer at Appreciate, these measures could lead to higher corporate earnings, further fueling market rallies. However, potential challenges such as increased labor costs due to immigration policies and tariffs could impact profitability and stock prices.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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