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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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Buyside Digest is not affiliated with, and does not endorse, Horos Asset Management. This analysis is provided for institutional research purposes only and is not investment advice.
"Horos delivered solid Q2 returns while maintaining deep skepticism about the AI investment boom's sustainability. The manager sees the $700 billion hyperscaler spending spree creating semiconductor bottlenecks and valuations reminiscent of historical bubbles."
Horos Asset Management delivered Q2 2026 returns of 4.9% for its international strategy and 6.6% for its Iberian strategy, bringing cumulative 14-year annualized returns to 12.4% and 12.2% respectively. The manager expresses significant concern about the sustainability of the massive AI investment cycle, with hyperscalers investing an estimated $700 billion in 2026 alone. This has created explosive bottlenecks throughout the semiconductor value chain, driving memory prices up 500-650% and causing companies like TSMC, SK Hynix, and Micron to multiply their market values 5-9 times. The manager compares current dynamics to historical bubbles including the dot-com era and railway mania, highlighting financial vulnerabilities including revenue circularity, demanding valuations, and the SpaceX IPO at $2 trillion valuation despite burning $14 billion in cash. Persistent inflation from structural deficits and the AI investment boom is keeping interest rates elevated, which could derail the cycle. The portfolio was repositioned by exiting stainless steel positions after strong gains and reallocating to undervalued holdings like Suzano, Bolloré, and Compagnie de l'Odet. The manager maintains unwavering focus on margin of safety and investment principles despite decorrelating from index performance.
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