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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
Buyside Digest is not affiliated with, and does not endorse, Deep Sail Capital Partners. This analysis is provided for institutional research purposes only and is not investment advice.
"Deep Sail Capital returned 41.6% net in Q2 2026, driven by concentrated positions in AI data center infrastructure including Credo Technology and Celestica. Manager warns AI mega IPO lockups may trigger market decline in early 2027 but remains bullish on three-year data center ramp."
Deep Sail Capital Partners returned 41.6% net in Q2 2026, significantly outperforming both the Russell 2000 and Russell Midcap Growth Index by over 20%. The fund's outperformance was driven by concentrated positions in AI data center infrastructure, with Credo Technology Group returning 191% and Amplitech Group returning 266%. The manager warns that Mega IPOs of foundational AI companies may signal the top of the AI market cycle, with post-lockup liquidity of $4.5T potentially forcing market decline in early 2027. Despite near-term concerns, the manager remains bullish on AI data center expansion over the next three years, holding Celestica as a core position to capitalize on transitions to 1.6T networking and co-packaged optics. The fund closed eight positions and opened five new ones in Q2, ending the quarter with 21 long positions and 23 short positions at 86% net long exposure. The manager views Celestica as the cheapest way to invest in AI data center growth, with the company benefiting from secular tailwinds and structural margin expansion.
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