Sands Capital Technology Innovators Fund Decided to Exit Its Stake in Apple (AAPL)

Sands Capital, an investment management company, released its “Sands Capital Technology Innovators Fund” Q2 2025 investor letter. A copy of the letter can be downloaded here. Technology Innovators focus on pioneering businesses worldwide that serve as key drivers or beneficiaries of significant long-term changes driven by technology. The fund returned 26.0% (net) in the second quarter compared to a 21.9% return for the benchmark, MSCI ACWI Info Tech and Communication Services Index. Easing geopolitical concerns, renewed AI optimism, resilient macroeconomic data, strong corporate earnings, and technical tailwinds boosted the markets for a quick recovery in the quarter. You can check the fund’s top 5 holdings to know more about its best picks for 2025.

In its second quarter 2025 investor letter, Sands Capital Technology Innovators Fund highlighted stocks such as Apple Inc. (NASDAQ:AAPL). Apple Inc. (NASDAQ:AAPL) is an American multinational company that designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. The one-month return of Apple Inc. (NASDAQ:AAPL) was 6.31%, and its shares lost 1.93% of their value over the last 52 weeks. On July 24, 2025, Apple Inc. (NASDAQ:AAPL) stock closed at $213.76 per share, with a market capitalization of $3.193 trillion.

Sands Capital Technology Innovators Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its second quarter 2025 investor letter:

"We exited Apple Inc. (NASDAQ:AAPL) based on several factors that we view as threats to its ability to sustain above-average earnings growth. Technology Innovators initiated a position in Apple in June 2024 based on the view that the combination of Apple’s integrated hardware, voice-activated assistant, and consumer data positioned the business well to deliver artificial intelligence (AI)-enabled personalized assistant capabilities and to collect tolls on the expansion of AI enabled applications that we expected to scale alongside computing power. Since then, we see limited evidence that Apple has effectively leveraged AI to accelerate device replacement cycles or reignite Services growth by enhancing developer-facing AI functionality.

Apple’s execution challenges are paired with demand headwinds in China, margin pressures, and challenges around search monetization. The company’s outward position on privacy and security adds another layer of complexity as we move to a more agentic generative AI paradigm where software executes tasks on behalf of consumers. Altogether, it’s increasingly uncertain how Apple will embrace this next paradigm shift while maintaining its position on privacy, fighting internal bureaucracy, and likely needing another reorganization around its internal AI research and development efforts. Considering these factors, we chose to exit Apple in favor of higher-conviction, duration-growth businesses."

Apple Inc. (NASDAQ:AAPL) is in 8th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 159 hedge fund portfolios held Apple Inc. (NASDAQ:AAPL) at the end of the first quarter, which was 166 in the previous quarter. While we acknowledge the potential of Apple Inc. (NASDAQ:AAPL) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Apple Inc. (NASDAQ:AAPL) and shared the list of AI stocks making waves on Wall Street. Polen Focus Growth Strategy also sold its investment in Apple Inc. (NASDAQ:AAPL) during Q2 2025. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.