Chinese hedge funds rotate out of Nvidia and US hyperscalers in evolving AI trade

China’s top-ranked hedge fund managers change tactics to ride the changing wave of overseas investments and market dynamics

Perseverance Asset Management International slashed its position on Nvidia by 72 per cent last quarter, while significantly adding holdings of memory chipmaker Micron Technology and flash memory product maker SanDisk, according to its latest 13F filings to the US Securities and Exchange Commission.

The reshuffles indicate that China’s top-ranked hedge fund managers were recalibrating portfolios to fit into the fast-changing narrative of the global AI trade, in which buying became more selective and stock picks turned more demanding, according to market observers.

Investors were turning cautious about those hyperscalers splurging capital on AI infrastructure investments and chasing other winners standing to benefit from the buildout.

“This is the point where the AI trade begins growing up,” said Stephen Innes, a managing partner at SPI Asset Management. “The first stage was about buying everything exposed to compute. The next stage will probably be about determining who actually earns economic rent from it. The market is already making that transition.”