Hedge fund giants suffered a severe blow in July as AI stocks plummeted, causing significant impact.

Affected by the sharp decline in AI stocks, several well-known hedge funds reported massive losses in July, with the most eye-catching being the high-leverage fund Situational Awareness, which sold most of its stock portfolio at a very low price to Ken Griffin's Citadel. Situational Awareness plummeted 67% last month, and the fund sold off most of its listed stocks to meet margin call requirements. Investors' concerns about the sustainability of massive corporate spending in the AI sector have also put pressure on this area. While other funds did not suffer such severe losses, July marked a significant reversal for trading that had previously been very favorable to investors. According to research firm PivotalPath, hedge funds have traditionally relied heavily on momentum trading, crowded long positions, and stock market returns. The firm has an index that tracks hedge funds trading tech, media, and telecom stocks, which fell 10% just last month, the largest drop among all of the firms benchmark indices. According to a knowledgeable source, Whale Rock Capital Managements flagship tech hedge fund declined 21.7% in July, erasing about half of its gains for the year. The AI-focused hedge fund managed by Altimeter Capital Management also fell 11% last month.