Viking Global loses 1.2% in October after avoiding major AI bets

Viking Global Investors, a flagship hedge fund, experienced a 1.2% decline in October, despite its cautious approach to artificial intelligence investments contributing to outperforming several competitors amid a technology sell-off, according to Bloomberg. This loss left Viking's gains for 2026 at around 1%, according to sources familiar with the firm's performance.

The results reflect co-founder Andreas Halvorsen's general aversion to making substantial bets on AI-related companies, where valuations seem unjustified compared to anticipated earnings. In a July letter to investors, Halvorsen emphasized the firm's focus on valuation discipline, cautioning that some stocks offer limited safety margins when evaluated against their revenue and earnings forecasts.

Viking, with approximately $35 billion under management, has historically adopted a cautious stance towards technology during periods of market enthusiasm. The firm largely avoided technology rallies in 2020 and 2021, sidestepping some of the double-digit losses experienced by competitors when valuations fell. In June, technology stocks constituted only 7.5% of Viking's long equity positions, according to regulatory filings.

Nonetheless, Viking maintained substantial exposure to AI supply chain companies, with Taiwan Semiconductor Manufacturing Company ranking second and Meta Platforms at sixth. The October sell-off had a more significant impact on firms with greater technology allocations. For instance, Lone Pine Capital's hedge fund dropped 9% that month, ending the year down 7%, while Tiger Global lost 8.5%.

Coatue Management, in contrast, saw a 0.2% gain in October, up 13% through the end of the month. Viking's more conservative strategy limited the technology correction's impact relative to some peers, though it also meant missing out on AI-driven opportunities. Balancing the risk of overpaying for high-growth tech companies against the possibility of rising valuations as AI adoption expands remains Halvorsen's challenge.

October's results showcase the advantages of avoiding popular positions while highlighting the opportunity cost of maintaining a more restrained exposure to the sector.