Portfolio reshuffling in a big move! Norwegian star fund cuts positions in "hero" Alibaba (BABA.US) while continuing to increase bets on Samsung's storage.

Norwegian star fund company Skagen AS is making different layouts for two hot artificial intelligence investment targets in Asia: increasing its position in Samsung Electronics, whose stock price doubled within the year, while reducing its position in Alibaba Group Holding Limited Sponsored ADR (BABA.US), which contributed the most to the fund's gains last year. Fredrik Bjelland, who manages the $2 billion Kon-Tiki emerging markets fund, revealed that he will continue to increase his position in Samsung Electronics throughout 2025, and expects strong demand for storage chips in the next two years. At the same time, as the stock price of Alibaba Group Holding Limited Sponsored ADR surged by 73% last year, he is gradually reducing this position - this e-commerce giant was the biggest contributor to the fund's returns last year. Bjelland believes that as investors have fully recognized its AI capabilities, Alibaba may have a harder time achieving further gains in the next stage. With the prosperity of data centers leading to a chip shortage, storage chips are becoming a key investment target for fund managers in the next phase of AI. Bjelland stated that his strategy is to fully allocate to companies directly driving AI development, such as storage chip manufacturers or Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, while reducing positions in application layer companies, as their business models are "yet to be validated." "We have reduced the risk exposure downstream in the value chain, including model builders and companies that need to compete for consumer attention," he said in an interview. "Positioning AI assets upstream in the value chain may provide a more diversified and superior risk-return profile." According to data, the Kon-Tiki Fund achieved a return rate of 28% in 2025, surpassing about 85% of similar funds. As of the end of December last year, around 17% of the fund's assets were allocated to Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) and Samsung, while the stake in Alibaba Group Holding Limited Sponsored ADR dropped significantly from 7.9% a year ago to 2.5%. Bjelland's confidence in Samsung reflects an increase in visibility in the storage chip market. With cloud service providers increasing capital expenditures, many high-bandwidth memory chips have already been fully booked this year. Despite the possibility of a sudden decline in demand occurring before the supply catches up, he believes that this risk will not materialize in the next two years. Compared to competitors SK Hynix and Micron Technology, Inc. (MU.US), Samsung's valuation still has room for further upside, "even if profits have peaked - which I don't think they have - the valuation of the stock is still moderately low." The fund also increased its position in Foxconn Precision, as another bet in the hardware sector. Bjelland pointed out that this Taiwanese company, besides assembling iPhones and Macs for Apple Inc., is receiving more orders for AI server racks, which belong to a higher profit margin business. The increase in AI hardware positions largely came at the expense of reducing the position in Alibaba. Bjelland stated that the Chinese company is still embroiled in a costly food delivery battle with Meituan, while massive spending in delivery and AI fields restricts the cash available for dividends and buybacks, which is a core logic for investing in the stock. Reducing Alibaba's position also allowed the fund to establish a new position in JD.com, Inc. Sponsored ADR Class A in November. Bjelland believes that the current valuation of the online retailer (lower than the sum of cash, investments, and market subsidiaries) is too low to ignore: "Investors are essentially getting a core consumer electronics and department store business with an operating profit margin of 5% at zero cost, and we believe this is an excellent risk-return combination."