Hedge funds heavily exposed to AI hardware stocks, including Point72, Whale Rock Capital Management and Seligman Investments, posted some of their strongest returns in decades during April, according to a report by the Wall Street Journal citing data from PivotalPath.
The gains cam as surging demand for semiconductors and data centre infrastructure fuelled a powerful rally across the sector.
The figures show that stock-picking hedge funds generated returns of 6.5% in April, marking the industry’s best month since December 1999. Technology-focused hedge funds performed even more strongly, with gains of 10.3% – the highest monthly return recorded by the index in its 28-year history.
The performance was driven largely by sharp advances in semiconductor manufacturers and companies supplying AI-related infrastructure, including memory chip producers, optical component makers and data centre equipment providers.
The rapid expansion of generative AI applications, coding tools and autonomous AI agents has triggered a surge in demand for computing capacity. Major technology companies including Microsoft, Alphabet, Meta and Amazon are collectively expected to spend hundreds of billions of dollars this year on AI infrastructure, with much of that investment directed toward advanced chips and data centres.
The resulting supply-demand imbalance has pushed up semiconductor prices and encouraged customers to lock in longer-term supply agreements with manufacturers.
A number of chip-related stocks have recorded triple-digit percentage gains this year, while Samsung Electronics recently joined the ranks of trillion-dollar companies amid investor enthusiasm surrounding AI infrastructure spending.
Whale Rock Capital’s publicly disclosed equity portfolio reportedly rose around 39% in April, supported by holdings in Sandisk, South Korean memory-chip manufacturer SK Hynix and Japanese chipmaker Kioxia Holdings.
Speaking at the Sohn Investment Conference, Whale Rock founder Alex Sacerdote described the current environment as a “golden age of hardware”, arguing that AI’s unprecedented computing requirements are transforming previously overlooked hardware businesses into highly attractive investment opportunities.
At Point72, the flagship fund gained roughly 4.5% during the month, its strongest performance in more than five years. The firm’s AI-focused Turion fund, launched by Steve Cohen alongside portfolio manager Eric Sanchez, reportedly returned 15% in April.
Meanwhile, the Seligman Tech Spectrum fund managed by Paul Wick gained close to 20%, representing its best monthly performance since launch in 2001. The fund has maintained significant exposure to companies such as Broadcom, Applied Materials, Lam Research and Bloom Energy, all viewed as beneficiaries of accelerating AI infrastructure deployment.
The gains have come despite a challenging macroeconomic backdrop that includes geopolitical tensions linked to the Iran conflict, persistent inflation concerns and diminishing expectations for near-term Federal Reserve rate cuts.
Morgan Stanley data suggests hedge funds are now more overweight semiconductor stocks than at any point in the past decade. The bank estimates the sector’s weighting in hedge fund portfolios has risen from 5.5% a year ago to approximately 20% today, with AI supply-chain companies accounting for nearly two-thirds of hedge fund gains from rising equity positions last month.
