Key facts
- Whale Rock Capital's flagship fund declined by 21.7% in July.
- The fund's year-to-date return fell to 35.1% from 72.5% prior to July.
- AI and semiconductor stocks experienced a sell-off in July.
- Coatue Management lost 8.3% in July, and Marshall Wace's Eureka fund was down 6.9%.
Several prominent stockpicking hedge funds experienced significant losses in July due to a sell-off in AI and semiconductor stocks. Alex Sacerdote's Whale Rock Capital saw its flagship fund decline by 21.7% in July, significantly reducing its year-to-date gains to 35.1% from 72.5%.
The firm's long-only fund also dropped 18.8% last month, though it remains up 36.8% for the year. The broader market downturn in July affected AI and semiconductor stocks, with names like SanDisk, Bloom Energy, and CoreWeave experiencing sharp declines. Mega-cap technology companies, including Google and Meta, also faced minor sell-offs as investors grew concerned about continued high spending on artificial intelligence.
Other notable funds also reported losses. Philippe Laffont's Coatue Management lost 8.3% in July, paring its year-to-date gains to 14.3%. Marshall Wace's long-short fund, Eureka, was down 6.9% for the month, bringing its year-to-date performance to 11.6%.
These results could have been worse for some managers, particularly Leopold Aschenbrenner, whose fund was reportedly bought by Citadel after facing margin calls due to bets on AI-linked companies. The sale of Aschenbrenner's portfolio to Citadel led to a brief rally in many AI stocks.