Whale Rock Capital’s flagship hedge fund plunged 21.7% in July, cutting its 2026 year-to-date return to 35.1% from 72.5% in June after a selloff in AI and semiconductor stocks that hit holdings such as SanDisk, Bloom Energy and CoreWeave (SanDisk down ~30% in the month). A related long-only fund fell 18.8% in July but still shows a 36.8% YTD gain; the $19 billion firm’s near-term outlook hinges on earnings and investor sentiment around AI infrastructure spending, underscoring market risk for tech and related assets.

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In Brief

Whale Rock's flagship fund fell 21.7% in July, its worst month of 2026.
The Boston hedge fund's year-to-date return dropped to 35.1% from 72.5% in June.
SanDisk, Bloom Energy, and CoreWeave slid as AI and chip stocks tumbled in July.

Whale Rock Capital Management’s flagship hedge fund fell 21.7% in July. The drop cut its 2026 gains roughly in half as artificial intelligence and semiconductor stocks sold off.

Whale Rock’s year-to-date return dropped to 35.1% through July. That’s down from 72.5% at the end of June, a person familiar with the matter told Bloomberg. Alex Sacerdote runs the Boston-based, $19 billion firm.

A Rough Month for AI Stockpickers

Whale Rock’s long-only fund fell 18.8% in July but still holds a 36.8% gain for the year. The firm marks its 20th anniversary in 2026. It rode a chipmaker rally through the first half of the year, but conditions reversed sharply in July.

Regulatory filings show Whale Rock added to its stakes in SanDisk and Bloom Energy during the first quarter. Both names tumbled in July alongside CoreWeave. All three fell victim to a broader memory sector selloff that hit chip and AI infrastructure stocks hardest.

Having recently added SanDisk to its holdings, the stock is down 30% in the last month. Image Source: Trading View

The damage spread beyond semiconductors. Mega-cap names like Google and Meta also saw minor declines in July. Meanwhile, investors grew wary of continued AI spending. That concern echoes a broader warning that the market now trades as one AI bet.

Not the AI Industry’s Only Casualty

Whale Rock wasn’t alone in taking a hit. Leopold Aschenbrenner’s Situational Awareness fund posted a 67% loss last month. That marked the sharpest hedge fund drawdown of July, following a forced unwind of its stock book.

The reversal fits a pattern playing out across Wall Street’s AI trade this summer. Some strategists compare it to the dot-com era. Others, however, see the pullback as a buying opportunity, not the start of a longer bust.

Whale Rock’s August performance may hinge on the current earnings season. Investor sentiment toward AI infrastructure spending will likely decide whether the fund stabilizes or extends July’s losses.

Read the article at BeInCrypto