London stock picker Stephen Yiu has blamed a rush of retail and meme stock traders for last week’s global sell-off in artificial intelligence shares, which caused his Blue Whale fund to lose 20 percent of its value in July, falling from £2.9 billion.
Yiu, whose fund counts City grandee Peter Hargreaves among its main backers, said small investors were spooked by fears over AI spending, growing Chinese competition and conflict in the Middle East.
“There’s a lot of what I would say low-quality money, retail money that’s been unwinding over the last few weeks,” he said. He added that conflict in Iran combined with meme-style trading in AI stocks, including in the likes of SpaceX, had produced a mega sell-off.
A sharp drop in South Korean chipmaker SK Hynix, one of Blue Whale’s biggest holdings, was a key driver of the fund’s losses. Hynix shares fell nearly 33 percent last month after results that missed expectations. South Korea’s stock exchange temporarily halted trading several times during the turmoil.
Despite the losses, Yiu said Blue Whale used the downturn to buy more Hynix shares at lower prices, saying the company’s earnings remained on a positive trajectory.
Wall Street’s Nasdaq also fell sharply before rallying to a slight gain by week’s end, helped in part by Microsoft, which rose 18 percent on strong sales and profit figures.
