Leopold Aschenbrenner, the Wall Street wunderkind whose hedge fund imploded in late July, placed huge bets on two AI stocks in the lead-up to the disaster.
Aschenbrenner's firm, Situational Awareness, owned a $5.7 billion stake in SanDisk and a $5.6 billion stake in Micron at the end of June, its quarterly portfolio update revealed on Friday.
Its positions in the memory-and-storage chipmakers accounted for 56% of a US stock portfolio worth just over $20 billion, excluding put and call options.
Situational directly owned less than $4 billion of stocks at the end of March, led by a $879 million stake in Bloom Energy. That means the value of its direct holdings soared more than fivefold in the three months ended June 30.
Aschenbrenner and his team more than doubled their direct stake in SanDisk to around 2.5 million shares and boosted their direct position in Micron from about 17,000 shares to 4.8 million shares.
They also ramped up Situational's TSMC stake from around 22,000 American Depositary Shares to 2.6 million, and established a $1.2 billion stake in Nebius at the end of June.
Moreover, Situational cut its number of option positions from 16 — including puts on the VanEck Semiconductor ETF, Nvidia, Oracle, Broadcom, AMD, Micron, TSMC, ASML, and Intel — to two small calls and an even smaller put.
It appears Situational took on more risk last quarter, given it sharply concentrated its portfolio on SanDisk and Micron, and cut its number of puts — a popular form of insurance against a stock declining — from 11 to one. Meanwhile, it pared its number of bullish call positions from five to two.
It is worth emphasizing that these portfolio disclosures, known as 13Fs, only provide snapshots of a single day in a three-month period.
They also exclude shares sold short, foreign-listed stocks, non-equity assets, and private investments such as Situational's reported stake in Anthropic, so they don't paint a full picture of an investor's strategy.
Shares of SanDisk and Micron tanked by 47% and 29%, respectively, in July, as investors took profits after a stellar run and fretted about sky-high valuations.
Both stocks have regained some ground since then, as investors wager they'll be major beneficiaries of the AI infrastructure buildout.
Aschenbrenner, a Columbia valedictorian and former OpenAI researcher, shot to fame after he built a $45 billion AI-focused hedge fund in under two years, and reported a 1,000% gain since inception earlier this year.
Situational's fortunes turned in July when a sell-off in AI stocks meant its highly leveraged portfolio sank by 67%, prompting margin calls from lenders and compelling Aschenbrenner to sell most of his publicly traded stocks to billionaire investor Ken Griffin's hedge fund, Citadel.
Aschenbrenner didn't immediately respond to a request for comment from Business Insider.