- Stock-picking hedge funds gained 6.5% in April — their best month since December 1999 — fueled by a historic rally in semiconductor and AI hardware stocks.
- Whale Rock Capital’s public stock portfolio surged ~39% in April on positions in Sandisk, SK Hynix, and Kioxia; Point72’s AI-focused Turion fund gained 15%.
- Hedge funds now hold semiconductors at 20% of net portfolios — up from 5.5% a year ago — the highest concentration in over a decade, per Morgan Stanley.
- AI-driven demand for compute is triggering multi-year supply contracts and triple-digit stock gains, with Samsung joining the trillion-dollar market cap club last week.
What Happened?
April was a blockbuster month for hedge funds betting on the AI hardware boom. Stock-picking funds gained 6.5% on average — the best single month since December 1999 — according to PivotalPath. Tech-focused funds did even better, rising 10.3% for their best month in 28 years of data. The rally was driven by explosive gains in semiconductor stocks: Whale Rock Capital’s publicly tracked portfolio was up roughly 39%, with big wins in memory-chip names like Sandisk, SK Hynix, and Kioxia. Steve Cohen’s Point72 flagship gained about 4.5% — its best month in five years — while its AI-dedicated Turion fund surged 15%. Seligman’s Tech Spectrum hedge fund, led by Paul Wick, jumped nearly 20%, its best performance since its 2001 launch.
Why It Matters?
The scale of these gains reflects how thoroughly the AI compute supercycle has reordered capital markets. The $670 billion in data center capex planned for 2026 by Microsoft, Alphabet, Meta, and Amazon is flowing straight into chip makers and equipment suppliers — companies that were until recently considered cyclical backwaters. Hedge funds have responded by concentrating into the sector at a level unseen in a decade, with semiconductors now comprising 20% of net fund portfolios vs. 5.5% a year ago. The AI trade has so far overpowered headwinds including the Iran war, sticky inflation, and dimming Fed rate-cut expectations. As Whale Rock’s Alex Sacerdote put it at the Sohn Conference: “We’re in a golden age of hardware.”
What’s Next?
The winning streak has extended into May, with the average global hedge fund up ~1.4% through mid-month, per Morgan Stanley. The key risk is the semiconductor sector’s notorious cyclicality — shortages have historically flipped to gluts. But for now, AI demand is showing no signs of cooling, multi-year supply contracts are locking in revenue visibility, and hedge fund positioning suggests conviction remains high. Whether the golden age endures or follows the pattern of prior chip cycles will be the defining question for the rest of 2026.
Source: The Wall Street Journal
