Browse the world's most comprehensive database of hedge fund investor letters, sorted by recent quarter. Access primary source research from leading institutional managers.
| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
Buyside Digest is not affiliated with, and does not endorse, Diranko Capital. This analysis is provided for institutional research purposes only and is not investment advice.
"But the manager cautions that the massive capital expenditures by Big Tech in AI are unlikely to achieve sustainable returns, prompting him to avoid the sector entirely."
Diranko Capital delivered a strong third quarter in 2025, achieving an after-fee return of 11.2% (14.8% gross) and bringing year-to-date net performance to 16.3% (21.5% gross). Since its inception on November 25, 2024, the fund has generated a net return of 22.3%, significantly outperforming its benchmarks, the MSCI World Small Cap (-2.8%) and the MSCI ACWI (3.6%). In this letter, manager David Diranko leverages his background as a data scientist to analyze the current AI investment landscape. He expresses deep skepticism regarding the massive capital expenditures of major platform companies (Microsoft, Alphabet, Meta, and Amazon), which are projected to spend $1 trillion on datacenters from 2024 through 2026. Diranko calculates that to achieve a standard 15% pre-tax ROIC, these companies would need to generate $660 billion in annual revenue, an amount far exceeding the total global enterprise software market. He argues that AI economics differ fundamentally from SaaS, as AI relies on ongoing, capital-intensive compute rather than low-cost replication. Ultimately, Diranko categorizes AI investments as 'Too-Hard,' preferring to invest in small, undervalued, and 'boring' businesses with a tangible margin of safety.
Sign in or create a free account to unlock full commentary, extracted equity pitches, and direct outbound manager source links with your 3 quarterly credits.
Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
Growth Outlook
Risk Appetite
Capital Deployment
Forward Guidance
Language Signal
Perceived Risk
Opportunity Density
Time Horizon