If You Only Own the Visible AI Hardware Stocks, You are Missing the Next Layer of the Megatrend
VMF Research - Top 10 Positions - May 2026
Since our last Leaderboard update, our Model Portfolios have shown remarkable strength.
VMF Research - Top 10 Positions - May 2026
Strong enough, in fact, to make us act.
In May, in VMF’s Strategic Asset Allocation, we closed the remaining position in our South Korean equities tilt through EWI 0.00%↑ .
Final result: +238%.
That is not a typo.
A position that more than tripled in less than 18 months has now been fully exited.
And the reason is no mystery.
We have been writing about it both in front of and behind the paywall: the visible side of the AI Trade is getting crowded.
Semiconductors have gone parabolic.
EWI’s heavy exposure to South Korea’s AI-linked hardware champions (including SK Hynix and Samsung) has been an extraordinary tailwind.
But markets have a way of changing character...
What begins as a differentiated thesis can eventually become consensus.
What begins as a powerful trend can turn into a crowded trade.
And what begins as opportunity can, at the wrong price and sentiment extreme, become risk.
Today, South Korean retail sentiment is showing the kind of euphoric, bubble-like behaviour that serious investors should not ignore.
So, we did not ignore it.
We closed the position.
To us, this was a textbook exit: a great thesis, a parabolic move, euphoric sentiment, and a return that had already exceeded even our more optimistic expectations.
But here is the important part:
We are not abandoning AI.
Far from it.
We are moving deeper into what we have been calling the invisible AI Trade.
The visible side of the AI Trade is easy to understand: chips, semiconductors, data centres, hardware, capex beneficiaries.
That trade has worked spectacularly.
But the market is now beginning to look beyond the buildout.
It is starting to ask a more important question:
Who actually benefits from the application of this technology?
That is where our focus has been shifting across VMF Research.
In April, we added exposure to the software sector through IGV 0.00%↑ , arguing that the market had gone too far in punishing high-quality software and workflow franchises.
A little more than a month and a half later, IGV is already up more than 30%.
And yet... it still has not made it into our public Leaderboard.
That tells you something.
The Leaderboard is not the research process.
It is the visible evidence of what the research process has already produced.
Beneath it, the next generation of potential outperformers is already being seeded.
Another fast-approaching contender is a special investment vehicle we selected in January to gain exposure to the potential IPOs of SpaceX and Anthropic.
Back then, this was definitely not the fashionable trade.
Gold, miners, commodities, and the Debasement Trade were stealing most of the attention.
How times have changed.
The market now seems increasingly eager for these IPOs.
And this still-unnamed position may soon force its way into our very public Leaderboard.
That is the point.
A lot is happening inside our Model Portfolios.
We are taking profits where trades have become crowded.
We are pressing where asymmetry is improving.
And we are continuing to search for the most attractive risk/reward opportunities tied to the AI megatrend... especially where the market is starting to move beyond the obvious capex winners and toward the companies that may actually capture the value created by AI’s application layer.
The Leaderboard shows what has worked.
But the next outliers are usually born before they appear on any public table.
Stay tuned.
Vasco.
Beat the old playbook. Get institutional-grade research delivered to your inbox.
From Market View:
Disclaimer: This is general information, not personalized investment advice. It’s not a recommendation to buy or sell anything. Investing involves risk, and past performance doesn’t guarantee future results. Do your own research and consider speaking with a licensed/authorized professional who understands your objectives and risk profile