Hedge funds went from short Tesla to long before the EV company hit $1 trillion market cap

Published Fri, Oct 29 20211:46 PM EDTUpdated Fri, Oct 29 20214:09 PM EDT

Hedge funds changed their minds on the controversial stock Tesla just in time to take advantage of the electric carmaker's rally to join the $1 trillion club. Hedge funds became overweight Tesla at the end of August after betting against the stock in the month prior, according to Jefferies. The company was one of the biggest short positions among hedge funds in July. The Wall Street firm used data from MSCI, which tracks $2 trillion in hedge fund assets. The data is monthly with a seven-week delay, which is different from the quarterly 13F filings institutional investors submit to the Securities and Exchange Commission. Hedge funds file their long positions with the SEC 45 days after every quarter ends. Tesla hit a $1 trillion market cap this week following news that Hertz is ordering 100,000 vehicles to build out its electric vehicle rental fleet by the end of 2022. The stock has jumped more than 40% this month, extending its three-month winning streak amid strong sales and bullish analyst calls. Earlier this month, "The Big Short" investor Michael Burry told CNBC exclusively that he's no longer betting against Tesla. Burry, one of the first investors to call and profit from the subprime mortgage crisis, owned 10,755 put contracts of Tesla at the end of the second quarter, according to filings. Long AMD Hedge funds also turned bullish on chip giant AMD recently, according to Jefferies. AMD's stock has risen more than 17% this month alone on the back of strong earnings. Earlier this week, the company reported third-quarter earnings and revenue that beat analysts' expectations. AMD also provided a strong forecast for the fourth quarter. Its sales jumped 54% during the quarter on strong demand for chips for servers and game consoles. Other than these few changes, hedge funds remained quiet heading into fall, Jefferies found. "We have been tracking Hedge Fund holdings for nearly two years and this seemed to be one of the quietest months we have witnessed," the Wall Street firm said.

The Tesla logo seen on a Supercharger rapid battery charging station for the electric vehicles company Tesla Motors.

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Hedge funds changed their minds on the controversial stock Tesla just in time to take advantage of the electric carmaker's rally to join the $1 trillion club.