In August, the Hedge Vision portfolio returned 5.37%. In comparison, the S&P 500 rose 1.13%, while the Nasdaq 100 increased 2.36%.

The portfolio has now returned 15.67% year-to-date compared to the S&P 500 and Nasdaq 100 at 12.07% and 16.86%, respectively

Total Positions: 27 compared to 25 on December 31, 2025

Top 10 Positions Concentration: 89.1% compared to 78.9% on December 31, 2025

Cash: 1.9% compared to 3.4% on December 31, 2025

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August marked another strong month for the Hedge Vision portfolio. ServiceNow (NOW) was my top performer with a 29.6% return, climbing the ranks to become my sixth-largest position, up from ninth at the start of the month. I bought my first shares of NOW in January and my cost basis stands at $109.22.

I have pounded the table on software stocks since they were indiscriminately sold off during Q1. Yes, AI will disrupt some laggards in the industry. However, companies that properly invest in AI and cloud will ultimately separate themselves from the pack. ServiceNow has proved it is one of those companies.

I still believe that software stocks will outperform semiconductor stocks until year-end. Since the above post, the iShares Expanded Tech-Software Sector ETF (IGV) has returned 12.5%, while the VanEck Semiconductor ETF (SMH) has risen just 1.5%.

My reasoning is very simple. Software stocks sold off too hard earlier this year, with much of that capital flowing into semis. While some of that capital has returned to software, the consensus trade remains crowded in semis and under-allocated to quality software names.

Still, that doesn’t mean I’m bearish on semis. Nvidia (NVDA) absolutely blasted it out of the ballpark when it guided for 70% revenue growth in FY2028 compared to the consensus estimate of 44%. NVDA is a must-own at current levels, and I will likely increase my position in the near future. Other semi names, such as AMD (AMD), have run up too quickly and could end up consolidating for several months.

“Our demand is much greater than 70%. Our supply allows us to confidently deliver 70%, and we’re going to continue to work with our supply chain to increase on that.”

-Nvidia CEO Jensen Huang, Q2 2026 conference call

August 2026 Buys

New Positions: None

Increased Positions: None

August 2026 Sales

Exited Positions: None

Reduced Positions: None

My buys and sales in real time, as well as further analysis and commentary, are shared with contributing members on Substack Chat:

Outlook for September

September has historically been a rocky month for the S&P 500. It’s the worst-performing month over the past 10 and 20 years and is the third-worst month in midterm election years.

Pair that with the 10-year Treasury yield at its highest level since January 2025, CME FedWatch odds pointing to a rate hike later this month, elevated oil prices from the ongoing U.S.-Iran war, and inflation remaining stubborn… well, you get the picture.

Some short-term volatility is to be expected. However, that doesn’t cancel out the fact that earnings have been extremely strong.

Of the 97% of S&P 500 companies that have reported their Q2 results so far, the average earnings growth rate has been a staggering 52%, according to FactSet. Wall Street had only expected 23.1% growth as of June 30.

If the 52% rate holds, it will be the highest since the 91.6% surge in Q2 2021, a period marked by the post-COVID reopening.

Meanwhile, the forward P/E ratio for the index sits at 19.6x, below the five-year average of 19.9x but higher than the 10-year average of 19x.

In other words, there isn’t bubble in the stock market. If a bubble does end up forming, an incredible amount of upside is on the way.

Hedge Vision

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The latest wave of 13F filings has arrived, offering a fresh look at how hedge funds positioned their portfolios in the second quarter.

The filings provided no shortage of drama. For example, investors received a snapshot of Situational Awareness’ portfolio before it plummeted 67% in July. In addition, David Tepper placed a new bet against Berkshire Hathaway, while Stan Druckenmiller bought call options on two Magnificent 7 members.

Let’s start with Situational Awareness.

Situational Awareness - How Leopold’s 67% Drawdown Unfolded

Leopold Aschenbrenner’s Situational Awareness was hit with margin calls and a 67% loss in July following a series of untimely and leveraged bets. Prior to the loss, Aschenbrenner was up a staggering 439% year-to-date as of June 30.

The fund’s Q2 13F provides a good indication of how events unfolded prior to the collapse.

Number of Positions: 26

Top New Positions: NBIS, STM, VSH, CBRS

Top Buys: MU, SNDK, TSM, NBIS, STM

Top Sales: SMH puts, NVDA puts, ORCL puts, AVGO puts, AMD puts

Average 13F Holding Period: 2.08 quarters

*Reminder: 13F options positions are calculated on a notional basis. The market value of options as reported in 13F filings assumes the value of the underlying shares and not the value of the options themselves.

For context here is the fund’s Q1 13F filing detailing its positions as of March 30.

Here’s a timeline of what may have happened:

• March: Aschenbrenner bets against AI stocks with puts on SMH, NVDA, AMD, AVGO, etc. He believes the rally has run ahead of itself, and a correction is imminent.

• April: AI stocks surge, with AMD and MU returning 68% and 40%, respectively. Aschenbrenner covers his shorts with losses and goes long AI stocks, like SNDK, MU, NBIS, and CRWV, with 4x leverage.

• May: AI stocks continue to climb as Aschenbrenner moves the market with his massive positions. He recovers some or all of his losses.

• June: The AI rally continues. Aschenbrenner recovers all of his losses and more, bringing his YTD return to 439%.

• July: Buyers of AI stocks dry up as the hype fades and South Korean memory stocks plunge, leading to some of Aschenbrenner’s positions falling by over 50%. Situational Awareness is forced to sell a large portion of its equity portfolio to Citadel at a discount in order to meet margin calls. That came just a few days before Aschenbrenner’s wedding to Avital Balwait, Chief of Staff to Anthropic CEO Dario Amodei.

“We traded a portion of our public portfolio in a block transaction to remove all leverage from the fund, and prevent further losses. All shorts were closed and reliance on portfolio financing removed."

-Leopold Aschenbrenner in a letter to investors, July 2026

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However, the Situational Awareness saga isn’t over just yet. Following the losses, the hedge fund was still up by 80% YTD, likely attributed to its bets on private companies, like Anthropic. In addition, it invested $400 million in chip startup Source Foundry in early August.

For more on Situational Awareness and the hedge funds that dominated the first half of 2026:

Duquesne Family Office - Stan Druckenmiller

Druckenmiller was extremely active during the second quarter, disclosing positions in 48 new stocks and selling out of 23 stocks. As a reminder, Druckenmiller operates more as a trader than a long-term investor, which is reflected in his average 13F holding period of just 2.4 quarters.

Number of Positions: 95

Top New Positions: INSM calls, GOOGL, FOXA, CDW, BTDR

Top Buys: INSM calls, GOOGL, AMZN, FOXA, CDW

Top Sales: AVGO, ROKU, OPCH, AA, WWD

Average 13F Holding Period: 2.4 quarters

Druckenmiller remains bullish on the equal-weight S&P 500 and Brazil with calls on RSP and EWZ. He’s also bullish on the megacap leaders, ramping up his AMZN call position and buying new positions in TSLA calls, META calls, and GOOGL. At the same time, he doesn’t have any exposure to NVDA, AAPL, and MSFT.

On the AI front, he completely sold out of MU, AVGO, COHR, and LITE. However, Druckenmiller likely remains bullish on AI and simply shifted his interests because he disclosed AMD and LRCX as new positions while holding on to TSM, SNDK, and STX.

Meanwhile, Druckenmiller sold 75% of his stake in ROKU while buying FOXA for the first time, lifting it to his 14th largest position. Fox announced in June that it would acquire Roku for $160 per share, valuing it at an enterprise value of $22 billion. As part of the deal, which is expected to close in the first half of 2027, Roku shareholders will receive $96 in cash and 0.9693 shares of FOXA.

Finally, genetics testing company Natera (NTRA) has remained Druckenmiller’s top position for eight consecutive quarters. Since then, NTRA has risen 138%, although it’s up by 607% since he first bought shares in Q3 2022.

Interested in what Druckenmiller and other top hedge funds bought in previous quarters? Check it out here:

Tiger Cubs - Light Street, Lone Pine, and Coatue

Tiger Cubs, or students of hedge fund pioneer Julian Robertson, are best known for launching some of the most successful tech-based hedge funds over the past few decades. Some, like Tiger Global, have struggled in recent years. Others, like Light Street, have timed the AI trade perfectly with strong conviction.

Light Street - Glen Kacher

Light Street’s long/short book was up 37% year-to-date as of June 30, ranking as the seventh-best-performing hedge fund on Wall Street. Kacher has taken full advantage of the AI and tech boom, returning 37.3% in 2025, 59.4% in 2024 and 45.7% in 2023.

Number of Positions: 28

Top New Positions: ALAB, TOST, RDDT, MELI, SNOW

Top Buys: ALAB, TOST, RDDT, GTLB, MELI

Top Sales: AMD, BILL, NVDA, IOT, AMZN

Average 13F Holding Period: 5.32 quarters

A common theme among top hedge funds was taking profits in mainstream AI stocks. Light Street was no different, selling ~50% of its stake in both AMD and NVDA. However, like Druckenmiller, Kacher appears to be shifting his AI exposure to second-order beneficiaries in the data and application layers, such as SNOW, GTLB, and RDDT.

Furthermore, TSM remains Light Street’s largest position for the 7th consecutive quarter. At the same time, he also owns puts against the chip foundry. This suggests Kacher is hedging downside risk while maintaining core exposure, and that the easy-money phase of the AI rally, led by NVDA and AMD, may be fading.

For more on the top-performing hedge funds of the first half of 2026:

Lone Pine - Steve Mandel

Lone Pine ranked two spots above Light Street, posting a 43% return as of June 30 and cementing its place as the fifth-best-performing hedge fund in the first half of 2026.

Number of Positions: 34

Top New Positions: NBIS, STX, HD, AMAT, LIN

Top Buys: NBIS, STX, HD, AMAT, LIN

Top Sales: VST, TLN, CLH, TSM, THC

Average 13F Holding Period: 2.53 quarters

Lone Pine carries the shortest average 13F holding among all Tiger Cubs at just 2.53 quarters. In comparison, Coatue has the longest at 13.14 quarters.

NBIS was Mandel’s top buy while also becoming his #1 position. In fact, all five of Lone Pine’s top buys (NBIS, STX, HD, AMAT, and LIN) moved into the hedge fund’s top 10 positions. That points to a clear sense of urgency and a willingness to scale conviction quickly.

Lone Pine’s top 10 positions are dominated by AI beneficiaries paired with a few outliers, such as HD, MDLN, and CVNA. MDLN is a particularly interesting pick, as the medical and surgical supplies company has sunk 16% since its IPO in December 2025.

Coatue - Philippe Laffont

Coatue and Philippe Laffont made an appearance on the top hedge funds of 2026 list as well, returning 24.5% and securing the 14th place spot.

Number of Positions: 66

Top New Positions: SPCX, INTC, CBRS, FPS, HUT

Top Buys: MU, SPCX, INTC, CBRS, FPS

Top Sales: AMAT, ASML, V, CHYM, LRCX

Average 13F Holding Period: 13.14 quarters

Micron was Coatue’s top buy, with Laffont picking up 2.97 million shares. Furthermore, SPCX became the hedge fund’s fourth-largest position following its IPO. Coatue participated in SpaceX’s 2021 late-stage growth fund when the company carried a $74 billion valuation. Today, SpaceX has a market capitalization of $1.9 trillion.

Elsewhere, Coatue slashed its ASML position by 40% while picking up 12 million shares of INTC, elevating the chipmaker to its 11th largest position. The hedge fund also took an interest in HUT, which is also owned by Tiger Cubs Lone Pine and Discovery Capital.

IPO Spotlight - SpaceX

A wave of hedge funds disclosed sizable positions in SpaceX following its IPO on June 12, making it one of the most popular trades in recent memory. It’s not often you see this many institutional investors move in with this kind of size at the same time. Publicly traded companies also joined in on the fun, including Nvidia, Google, and AMD.

Notable shareholders with a portfolio allocation over 50% include Saudi Arabia’s Public Investment Fund (PIF), Thrive Capital, D1 Capital, and Sequoia Capital U.S.

However, this doesn’t mean that everyone bought in at the IPO. Instead, the vast majority of major shareholders invested privately at a much lower valuation relative to the IPO price. Then, their stakes skyrocketed after SpaceX debuted publicly.

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David Tepper Shorts… Berkshire Hathaway?

David Tepper’s 13F filing revealed a surprising update: put options on Berkshire Hathaway. Although the position is relatively small, it stands out given Berkshire’s perception as a defensive, long-term holding. It’s possible that Tepper is looking to take advantage of investor unease tied to Greg Abel succeeding Warren Buffett.

Number of Positions: 27

Top New Positions: AAPL puts, BA, AAL, CRWV, AVGO

Top Buys: AAPL puts, BA, AMZN, TSM, AAL

Top Sales: MU, SNDK, GLW, BABA, PDD

Average 13F Holding Period: 12.11 quarters

Tepper also purchased puts against AAPL as a new position. AAPL just so happens to be Berkshire’s largest position with a 22% weight.

Furthermore, Tepper sold out of SNDK after holding it for just one quarter. In addition, he cut his MU position by 41%, signaling profit-taking in the memory space. I wouldn’t say he’s bearish on memory, as MU ranks as his second-largest position behind AMZN. In addition, the iShares MSCI South Korea ETF (EWY), which has a 43% weight to SK Hynix and Samsung, is his sixth-largest position.

Transportation was a notable theme for Tepper. During the second quarter, he increased his UBER stake by 21.5%, making it his fifth-largest position. He also initiated new positions in BA and AAL.

Tepper, who emerged as a China bull in 2024, continues to slash his exposure to the country. His total 13F exposure to China fell to 4.4% compared to 9.8% in Q1, 19.53% in Q4, and 28.47% in Q3. He now holds only BABA and BIDU after completely exiting PDD, KWEB, and JD in the second quarter.

13F Filings From Top Hedge Funds

For the readers who prefer to just view 13Fs, here are 10 filings from top-performing hedge funds with an average 13F holding period of at least six quarters:

Berkshire Hathaway - Greg Abel

Number of Positions: 29

Top New Positions: DHI

Top Buys: GOOGL, GOOG, DAL, LEN, M

Top Sales: BAC, COF, KR, NUE, DVA

Average 13F Holding Period: 25.55 quarters

Altimeter - Brad Gerstner

Number of Positions: 20

Top New Positions: CBRS, QCOM, SPCX, MU, AMAT

Top Buys: CBRS, QCOM, SPCX, MU, AMAT

Top Sales: META, AXON, UBER, AVGO, ARM

Average 13F Holding Period: 9.3 quarters

Whale Rock - Alex Sacerdote

Number of Positions: 35

Top New Positions: ALAB, SNOW, TWLO, STX, INTC

Top Buys: AMD, ALAB, SNOW, TWLO, VIAV

Top Sales: AEIS, SNDK, RBLX, TSEM, AVGO

Average 13F Holding Period: 6.11 quarters

TCI Fund - Chris Hohn

Number of Positions: 11

Top New Positions: MLM, VLC

Top Buys: MLM, VLC, GOOG, SPGI, FER

Top Sales: MSFT, CP, CNI, GE

Average 13F Holding Period: 21.82 quarters

SRS Investment Management - Karthik Sarma

Number of Positions: 33

Top New Positions: COHR, FRMI, TSLA calls, CRL, RUM

Top Buys: COHR, RBLX, FRMI, TSLA calls, MDB

Top Sales: AMD, HUT, TWLO, ABNB, TPR

Average 13F Holding Period: 9.33 quarters

SCGE Management - Jeff Wang

Number of Positions: 21

Top New Positions: SPCX, AMD, CIEN, CPNG, MPWR

Top Buys: SPCX, AMD, CIEN, CPNG, SNDK

Top Sales: DASH, GOOGL, NTSK, CHYM, NVDA

Average 13F Holding Period: 9.24 quarters

Valley Forge Capital - Dev Kantesaria

Number of Positions: 7

Top New Positions: None

Top Buys: None

Top Sales: MA, FICO, SPGI, V

Average 13F Holding Period: 33.43 quarters

Punch Card - Norbert Lou

Number of Positions: 5

Top New Positions: None

Top Buys: None

Top Sales: SGOV

Average 13F Holding Period: 14.2 quarters

Dorsey Asset Management - Pat Dorsey

Number of Positions: 11

Top New Positions: None

Top Buys: APP, BKNG, UBER, SPGI, META

Top Sales: SUNB, AER, ASML

Average 13F Holding Period: 6.55 quarters

Baillie Gifford - Various Managers

Number of Positions: 274

Top New Positions: SPCX, BSP, CFR, KLAC, VALE

Top Buys: SPCX, RY, CRH, QXO, AVGO

Top Sales: RKLB, CPNG, META, TEAM, DDOG

Average 13F Holding Period: 19.01 quarters

Hedge Vision - Institutional Insights

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In July, the Hedge Vision portfolio returned 7.1%. In comparison, the S&P 500 rose 0.09%, while the Nasdaq 100 fell 5.15%.

The portfolio has now returned 9.77% year-to-date compared to the S&P 500 and Nasdaq 100 at 9.2% and 12.17%, respectively.

Total Positions: 27 compared to 25 as of December 31, 2025

Top 10 Positions Concentration: 88.3% compared to 78.9% on December 31, 2025

Cash: 2.0% compared to 3.4% as of December 31, 2025

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July was a fantastic month for the Hedge Vision portfolio. That came despite a strong selloff in AI stocks that abruptly reversed following news of Situational Awareness and Leopold Aschenbrenner getting margin called.

For those unfamiliar, Situational Awareness reportedly had 4x leverage on a portfolio extremely concentrated in AI stocks, including Nebius (NBIS), SanDisk (SNDK), and CoreWeave (CRWV). As those stocks began to plummet, the leverage quickly became a problem, triggering margin calls.

Instead of slowly unwinding positions in the open market, much of the portfolio was sold in bulk to Citadel. Situational Awareness didn’t really have a choice. As the losses piled up, margin calls forced it to raise cash quickly. Dumping everything into the open market would’ve pushed prices even lower, so instead it sold the portfolio in one shot to Citadel. That way, it could meet the margin call immediately without causing a full-blown crash.

When the news broke, it actually had the opposite effect many would expect. Instead of driving further selling, it signaled that the forced seller was out and the overhang was cleared. With no more margin-driven selling and a large buyer stepping in, AI stocks rebounded.

In a letter to investors, Aschenbrenner said the fund fell 67% in July but was still up 80% YTD. The positive return may be entirely due to its private investment in Anthropic and other companies. It’s possible, and I would say likely, that a large majority of Situational Awareness’ public equity portfolio was wiped out.

“My partner Charlie says there is only three ways a smart person can go broke: liquor, ladies and leverage.”

-Warren Buffett

For a more detailed look at Situational Awareness’ portfolio and the activity of other hedge funds:

My portfolio remains heavily tilted toward software. Earlier this year, I said Q1 presented the best buying opportunity in several years, and I fully capitalized on that.

Microsoft (MSFT) helped raise my conviction after reporting second-quarter Azure growth of 43%, accelerating from 40% in the prior quarter. In addition, Azure revenue surpassed $100 billion in FY2026 for the first time, while Copilot reached over 30 million paid seats. Microsoft’s investments in AI are clearly paying off, with the stock soaring 21% in July. Sentiment changes fast.

In January, I started a new position in ServiceNow (NOW). I continued to buy through July, raising NOW’s allocation to 4.7% as my ninth largest position. ServiceNow released its earnings during the month as well, with revenue, subscription revenue, and current remaining performance obligations (cRPO) growth all tracking above 20%. The company also raised its full-year 2026 subscription revenue guidance to between $15.76 and $15.78 billion, implying 22.5% growth, or 21% in constant currency.

AI isn’t disrupting ServiceNow as many had feared. It’s making the company stronger by increasing demand for automation and turning its platform into the system that actually executes what AI suggests.

“There’s going to be more AI. There’s going to be more incidents, and all these things drive more and more volume to ServiceNow. That’s why we increased the full-year guide.”

-CEO Bill McDermott in an interview with CNBC

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July 2026 Buys

New Positions: None

Increased Positions: ServiceNow (NOW)

July 2026 Sales

Exited Positions: None

Reduced Positions: None

My buys and sales in real time, as well as further analysis and commentary, are shared with contributing members on Substack Chat:

Outlook for August

The market is headed for its worst two-month stretch of the year. In addition, August has historically been the third-worst month with an average gain of 0.21% and positive returns 57% of the time.

That comes on top of the U.S.-Iran war that has shown no signs of ending and elevated oil prices caused by shipping disruptions in the Strait of Hormuz. Meanwhile, Trump continues to move markets at the tap of a keyboard button, threatening to escalate military operations before later reneging.

As I’m sure you’ve noticed, the flip-flopping has shaped 2026 into an incredibly volatile year. That volatility is likely to continue into year-end and could place the Nasdaq 100 back into correction territory after it briefly fell there in July. Be prepared, but also be ready to turn volatility into opportunity.

Hedge Vision

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2026 has been the year of the stock-picker, with several memory and semiconductor names delivering triple-digit gains and leaving the S&P 500 and Nasdaq 100 in the dust.

Goldman Sachs notes that the average equity-focused hedge fund relying on fundamental analysis returned 18.4% during the second quarter and 17.4% year-to-date. Overall, hedge funds posted their best first-half performance since 2013, according to data firm PivotalPath.

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As a reminder, hedge funds aren’t required to disclose their returns to the public under SEC guidelines, only to their clients. That means the returns of many notable managers, such as Stanley Druckenmiller’s Duquesne Family Office and David Tepper’s Appaloosa, are still unknown.

Hedge Fund Spotlight: Situational Awareness

You may have noticed that Leopold Aschenbrenner’s Situational Awareness isn’t on the list. Through May, the fund had surged roughly 270% year-to-date after fees, pushing its assets under management (AUM) above $20 billion. Unfortunately, its June returns haven’t been publicized, making it ineligible.

Since launching in mid-2024, Situational Awareness has delivered more than 1,000% in net returns. The outsized gains have come under the leadership of a 24-year-old ex-OpenAI researcher whose rise has captivated both retail investors and Wall Street.

Here are Aschenbrenner’s top positions as of Q1:

Number of Positions: 42

Top New Positions: SMH puts, NVDA puts, ORCL puts, AVGO puts, AMD puts

Top Buys: SMH puts, NVDA puts, ORCL puts, AVGO puts, AMD puts

Top Sales: INTC calls, LITE, CRWV calls, BE, CIFR

Average 13F Holding Period: 1.05 quarters

For a deeper look at Situational Awareness’ portfolio and the activity of other top-performing hedge funds during Q1:

Tiger Cubs 2026 Returns

Lone Pine led the Tiger Cubs during the first half with a 43% return, with Light Street’s Long/Short fund trailing behind at 37%. The strong performance extends an impressive run for Light Street, which has ranked among the industry’s top performers over the past three years.

Unsurprisingly, the Tiger Cubs remain heavily concentrated in tech and AI, with Nvidia (NVDA), Taiwan Semiconductor (TSM), and Amazon (AMZN) ranking among their consensus holdings.

D1 Capital’s top three positions stand apart from the pack. While its peers crowded into the AI theme, D1’s top holdings consist of a grocery delivery platform, a Latin American e-commerce leader, and a global building materials manufacturer.

2026 Top Hedge Funds: #1 TAL China Focus

TAL China Focus, managed by Trivest Advisors, led all hedge funds with a staggering 95.1% return. While Trivest is required to file a quarterly 13F, the filing only discloses the manager’s aggregate U.S. equity holdings, not the positions held by its individual funds. Therefore, the specific positions of TAL China Focus are unclear.

Trivest’s Chinese holdings include Futu (FUTU) and Trip.com (TRIP) after it liquidated its entire Alibaba (BABA) stake in Q1. Given that the iShares MSCI China ETF (MCHI) fell 18% during the first half of the year, it’s possible that a large portion of TAL’s performance came from bearish exposure to China stocks.

Number of Positions: 29

Top New Positions:

Top Buys: TER, MU, LITE, GLW, ECHO

Top Sales: SNDK, AVGO, GOOGL, NVDA, WDC

Average 13F Holding Period: 4.55 quarters

Trivest operates as an extremely secretive Hong Kong-based investment firm with limited public information about its operations and investment strategy. The firm was founded in 2010 by State Street veteran Wu Huiman, former Citigroup Head of China Research Xue Lan, and former Lehman Brothers China equities analyst Lu Sun.

Trivest’s website, in true Buffett-esque fashion, is strikingly minimal, reflecting a firm more focused on investing than marketing. Unlike the Berkshire Hathaway website, however, Trivest’s page doesn’t have a single clickable link.

2026 Top Hedge Funds: #2 Whale Rock

Alex Sacerdote and Whale Rock have consistently ranked among the industry’s top-performing hedge funds in recent years.

The tech-focused fund returned 27% in 2025, 54.1% in 2024, and 31.8% in 2023. It’s set to deliver another year of double-digit returns with gains of 72.5%, powered by well-timed bets in AI beneficiaries.

Number of Positions: 35

Top New Positions: AEIS, MKSI, LRCX, TSEM, VIAV

Top Buys: AEIS, MKSI, LRCX, TSEM, VIAV

Top Sales: CVNA, SMTC, CIEN, MELI, NU

Average 13F Holding Period: 6.6 quarters

Sacerdote has consistently pointed to the S-curve as the foundation of Whale Rock’s investment approach. The S-curve is a framework used to identify companies undergoing periods of rapid growth as they benefit from major technological shifts.

“The S-curve is crucial because every technology follows this pattern. Smartphones were out 10 years before the iPhone. The internet was out 20 years before Netscape. AI had been out, hidden inside these companies, but it wasn't until ChatGPT took it public and ignited it. Electric vehicles — Tesla went public 15 years before 2019, when it went vertical, because there were so many barriers to adoption.”

-Alex Sacerdote on the Invest Like the Best Podcast, Episode 477

Sacerdote believes that AI is still in its early innings. Under the S-curve framework, that means there’s still plenty of upside left in AI, even if you missed the recent memory and semiconductor run-up.

“But where are we in terms of the number of people doing that? Sundar said it's 10 bips of the knowledge workers of the world. So Anthropic has something like 14 or 15 million DAUs, and probably only a small portion of those are truly doing AI the way you can do it. So that 10 bips — it's a classic S-curve, where these are the tinkerers, then it goes to the early adopters, then the early mainstream. But you're going to go from 10 bips to 2% or 3%, to 5%, to 15% in the next four years.”

-Alex Sacerdote on the Invest Like the Best Podcast, Episode 477

As for the secret behind Sacerdote’s success? Stay committed to the game. Recognize market cycles. And most importantly, have conviction in your ideas.

“My mom said, why do you tell everyone your secret? It's like, why does the casino teach people how to play blackjack? It's really hard to do. You have to be comfortable investing.”

-Alex Sacerdote on the Invest Like the Best Podcast, Episode 477

For more on Whale Rock, Alex Sacerdote, and the S-curve:

2026 Top Hedge Funds: #3 Keystone Investors

Keystone Investors secured the third-place spot with a 62.7% return. Since being spun off from Schonfeld Strategic Advisors in 2022, the long/short hedge fund has delivered positive returns every year.

Keystone didn’t file a 13F for the first quarter of 2026. It’s not exactly clear why, although possible explanations include falling below the SEC’s $100 million reporting threshold, restructuring its investment entities, or no longer holding enough 13F-reportable securities to require a filing. The first explanation seems unlikely given that its Q4 2025 13F AUM was $1.1 billion.

Here are the fund’s holdings as of Q4 2025:

Similar to Whale Rock and Trivest, Keystone leaned heavily on the AI theme with positions in NVDA, MU, WDC, STX, and COHR. The firm also placed an emphasis on healthcare with exposure to IQV, GILD, XBI, and LLY.

Keystone’s investment strategy centers on taking a three-to-five-year view of major themes and finding companies with long-term growth potential. The firm uses fundamental analysis, a concentrated portfolio approach, and various long/short positions to capitalize on market opportunities.

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Thanks for reading! For those interested in the top hedge funds of previous years:

Hedge Vision - Institutional Insights

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During Q1, the Hedge Vision portfolio fell 15.72%. In comparison, the S&P 500 declined 4.54%, while the Nasdaq 100 shed 5.67%.

Total Positions: 27 compared to 25 on December 31, 2025

Top 10 Positions Concentration: 76.9% compared to 78.9% on December 31, 2025

Cash: <0.1% compared to 3.4% on December 31, 2025

2026 has been challenging for many investors, although it ultimately depends on how you view the situation. In my view, Q1 presented the best buying opportunity in several years. I purchased more during Q1 than all of 2025 combined with a focus on software, cloud, and e-commerce. Month-to-date, the portfolio has returned 10.8% as of April 21.

Concerns surrounding the U.S.-Iran war and AI disrupting tech and software companies triggered panic selling among many investors. That impacted my portfolio particularly hard due to its high software exposure.

However, wars have rarely had a lasting impact on the market, while fears of AI leading to lower sales and margins for software companies are completely overblown. AI will definitely impact the industry, although the idea that it will suddenly erode demand doesn’t make much sense when most of these companies are the ones building and monetizing AI in the first place. Indiscriminate selling creates opportunity.

The U.S.-Iran war has resulted in a wave of uncertainty and intimidating headlines, but the market has already priced in that risk and recovered from it. The S&P 500 bottomed on March 30 and has returned 11% since then. That comes despite both sides accusing each other of violating the ceasefire and a failed first round of peace talks.

Meanwhile, Wall Street has continued to lift its S&P 500 earnings growth outlook for 2026, with estimates rising from 14.7% at the end of February to 17.6% today.

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The labor market has largely been immune to the effects of the war, with initial jobless claims holding in a tight range since 2022. Consumer spending, which accounts for roughly two-thirds of GDP, has also remained resilient.

However, inflation poses a real issue here and is worth monitoring. Since the start of the war on February 28, traffic through the Strait of Hormuz, which handles roughly 20% of global oil flows, has plummeted by 95%.

The Consumer Price Index (CPI) surged 0.9% month-over-month in March, registering its highest level since June 2022, as prices at the pump skyrocketed. Within the CPI, gas prices surged 21.2%, making up nearly three quarters of the overall monthly increase.

The impact of inflation on the economy hinges on how long Hormuz will remain closed. Even in the event of a reopening, it will take several months for supply to normalize. Still, the economy should be able to absorb a temporary elevation of oil and gas prices given strong employment and spending.

Q1 2026 Buys

New Positions: ServiceNow (NOW), Fair Isaac (FICO)

Increased Positions: ServiceNow (NOW), Fair Isaac (FICO), MercadoLibre (MELI), Alibaba (BABA), Uber (UBER), Microsoft (MSFT), Zscaler (ZS), Datadog (DDOG), KraneShares CSI China Internet ETF (KWEB)

Q1 2026 Sells

Exited Positions: None

Reduced Positions: None

My buys and sales in real time, as well as further analysis and commentary, are shared with contributing members on Substack Chat:

Outlook for Q2

As previously stated, Q1 presented a major opportunity to pick up high-quality tech and software names at a discount. Company executives agreed, with insider buying for companies within the State Street Technology ETF (XLK) surging to a 15-year high. Much of the demand was concentrated in software, with insiders from Microsoft, ServiceNow, Salesforce, and Palo Alto Networks snatching up shares during the quarter.

I expect tech stocks to outperform the S&P 500 for the rest of the year. This theme has already materialized, with XLK returning 21% since March 30, outpacing the benchmark index at 11%.

Headlines from the U.S.-Iran war will continue to be at the top of mind for investors. Any resulting dips should be bought, as the worst has already come and gone.

Hedge Vision

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The Hedge Vision portfolio returned 12.86% in 2025 compared to the S&P 500 and Nasdaq 100’s total returns of 17.88% and 21.02%, respectively.

Returns Since Inception:

2020 starting from May: +54.80%

2021: +0.33%

2022: -48.99%

2023: +69.13%

2024: +32.89%

2025: +12.86%

Total Positions: 25 compared to 27 as of December 31, 2024

Top 10 Positions Concentration: 78.9% compared to 75.9% as of December 31, 2024

Cash: 3.4% compared to 1.5% as of December 31, 2024

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2025 Reflections

Alibaba (BABA) was my top performer in 2025 with a 74% return, driven by AI momentum, cloud growth, and stimulus from the Chinese government. During Alibaba’s most recent quarter, cloud revenue growth accelerated to 34% from 26%, while AI-related revenue grew at a triple-digit pace for the ninth consecutive quarter. BABA was 6.6% of my portfolio at the beginning of the year and rose to 11.5% by year-end

I added BABA aggressively between $103 and $113 during the first two quarters, with my last purchase in July. I expect another year of outperformance in 2026 for the Chinese e-commerce and AI leader, as well as for Chinese stocks in general.

I also doubled down on MercadoLibre (MELI) during the fourth quarter. MELI faced a 23% drawdown in December over fears of margin compression. However, the company’s management has clearly stated that the falling margins, attributed to lower free shipping thresholds, logistics network expansion, and building out Mercado Pago, will lead to long-term growth. Actions speak louder than words, and the Latin American e-commerce leader has proven that by posting 30%+ annual sales growth for 27 consecutive quarters.

“We don’t focus on short-term margins, we look at long-term value creation. So, we invest behind our ecosystem.”

MercadoLibre CFO Martin de los Santos, October 2025

Unfortunately, my two-year streak of beating the S&P 500 and the Nasdaq 100 came to a close in 2025, as my performance fell significantly during the fourth quarter. That was mostly due to a sell-off in software stocks as investors grew worried about the pace of AI spending and whether AI would reduce the need for SaaS. My YTD return peaked in September at 24% before almost being slashed in half by year-end.

This hasn’t lowered my convictions in my software holdings at all. AI isn’t going anywhere, and the proliferation of data centers necessitates more cybersecurity spending. That benefits two of my top positions, CrowdStrike (CRWD) and Zscaler (ZS).

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The S&P 500’s Biggest Loser of 2025

Several long-term compounders pulled back in 2025, including Fair Isaac (FICO), Fiserv (FISV), and Nike (NKE). The Trade Desk (TTD) made the cut as well.

TTD was the worst-performing S&P 500 stock in 2025 with a 67% loss. I made the mistake of trying to catch the falling knife and started a new position in the ad-tech company in February and averaged down until October. My position, with a cost basis of $61, was down by 37.8% at year-end.

I went against one of my key tenets when buying TTD, which is to invest in the leaders of an industry and not the laggards. While TTD has made a name for itself in the ad industry as a unique demand-side platform, Google (GOOGL), Meta Platforms (META), and Amazon (AMZN) remain the undisputed heavyweights with “walled garden” moats that proved increasingly difficult to compete with in 2025.

The lesson I learned is that in winner-take-most markets, I should stick with the leaders that have ecosystem advantages. Still, at current levels, TTD could be a compelling rebound candidate in 2026 if it defends market share, executes on its Kokai platform, and capitalizes on connected TV (CTV) tailwinds. That’s a big if.

Outlook for 2026

Every single S&P 500 price target for 2026 points to positive returns, with the most cautious outlook coming from Bank of America at 7,100. This reflects a broad consensus that the bull market will extend into a fourth year, driven by strong earnings growth, continued AI momentum, lower interest rates, and a resilient economy. That could be a warning sign for the contrarian investor.

The S&P 500 avoided a 10% correction in 2024, although 2025 saw an 18.9% drawdown from February to April. Investors should be prepared for a similar event in 2026, as the benchmark index has experienced, on average, a 14.4% pullback every year since 1980. With the S&P 500 up by nearly 40% since the April lows, that may come sooner than later.

As a long-term investor, I look forward to drawdowns because they often create mispricing from panic-selling, which leads to buying opportunities.

As of now, a softening labor market appears to be the biggest economic risk. The U.S. added 584,000 jobs in 2025, marking the worst year for job gains outside of a recession since 2003.

Furthermore, inflation, which has cooled in recent months yet remains stubbornly above the Fed’s target of 2%, could experience a post-tariff rebound as higher production and import costs filter through to consumer prices. With Fed Chair Jerome Powell set to be replaced by a dovish Trump appointee in May 2026, the central bank runs the risk of stimulating inflation with lower rates.

Hedge Vision

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