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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, Moon Capital Management. This analysis is provided for institutional research purposes only and is not investment advice.
"Moon Capital underperformed in H1 2026 with a 4% return versus the S&P 500's 9.6%, driven by significant underweight to AI stocks. The manager actively avoids major tech companies deploying $1.8 trillion in AI capex with uncertain returns."
Moon Capital Management generated a 4% return in the first half of 2026, underperforming the S&P 500's 9.6% gain as the market was driven primarily by AI-related stocks. The manager maintains only 10% technology exposure versus 39% for the index, expressing significant concern about the $1.8 trillion in AI capital expenditures planned by major tech companies through 2027. These investments have transformed capital-light, high-cash-flow businesses into capital-intensive operations with minimal free cash generation, raising questions about returns above cost of capital. The portfolio exited DaVita after a 174% gain over 3.5 years, as valuation normalization and flat volume growth reduced future opportunity. The manager added Zoetis at an attractive 11x earnings multiple, viewing temporary product cycle challenges as creating an entry point in a high-quality animal health franchise with strong competitive positioning, innovation capabilities, and secular growth tailwinds. The manager remains focused on selective opportunities in businesses with durable advantages trading at depressed valuations due to temporary setbacks.
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