Wall Street Hedge Fund, 67% Forced Liquidation Catastrophe..."Betrayal of Trusted AI"

▲ NVIDIA (NVDA), Artificial Intelligence (AI), Bear Market/AI Generated Image

The flagship hedge fund of Whale Rock Capital Management suffered a 21.7% loss in July. Half of this year's profits, accumulated through artificial intelligence (AI) investments, vanished in just one month.

According to BeInCrypto on August 5 (local time), Whale Rock's year-to-date cumulative return fell from 72.5% at the end of June to 35.1% at the end of July. The 21.7% loss rate in July was the largest monthly decline this year. Whale Rock is a Boston-based hedge fund manager with $19 billion in assets under management.

Whale Rock's long-only fund also dropped 18.8% in July. However, its year-to-date cumulative return remained at 36.8%. Celebrating its 20th anniversary, Whale Rock rode the semiconductor stock rally in the first half of the year, but market trends changed rapidly in July.

Whale Rock increased its stakes in SanDisk and Bloom Energy in the first quarter. Both stocks, along with CoreWeave, plunged in July. SanDisk's stock price fell 30% in one month. The selling pressure that began in the memory semiconductor sector heavily impacted semiconductor and AI infrastructure stocks.

The selling shock spread to large tech stocks. Google and Meta also saw slight declines in July. Investors began to be wary of the situation where major tech companies' AI investment spending continues to increase.

Whale Rock was not the only one affected. The Situational Awareness fund, managed by Leopold Aschenbrenner, recorded a 67% loss in July. This was the largest decline among hedge funds in July, as forced liquidation of its stock portfolio occurred.

[Key Summary of the Article]

-Whale Rock's flagship hedge fund fell 21.7% in July, lowering its year-to-date cumulative return from 72.5% to 35.1%.

-The sharp decline in semiconductor and AI infrastructure stocks, including SanDisk, Bloom Energy, and CoreWeave, exacerbated the losses.

-The Situational Awareness fund also recorded a 67% loss in July after the forced liquidation of its stock portfolio.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*