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Leopold is Back: 13F Filings Reveal a New Bet · In the Loop AI

0:00
Josh: The most famous AI bull on Wall Street just called the top on the entire AI market.
0:05
Josh: Leopold Ashenbrennan, the 24-year-old ex-open-air researcher who got fired,
0:09
Josh: started a fund, and turned $250 million into $14 billion in less than two years is back.
0:16
Josh: And his latest investment portfolio is not what you'd expect.
0:19
Josh: He's gone completely bearish the entire stock market. He has taken out an $8
0:23
Josh: billion short across the biggest names in AI. We're talking about NVIDIA,
0:27
Josh: AMD, Broadcom, and the entire semiconductor supply chain.
0:31
Josh: But all is not lost. He also revealed where the next biggest AI investment is
0:35
Josh: going to be. It's in power and memory.
0:37
Josh: He's doubled down on his investments in data centers, as well as three brand
0:40
Josh: new companies. We're going to get into all of this, but first,
0:43
Josh: let's talk about the biggest changes.
0:44
Ejaaz: EJ, the largest company in the world, NVIDIA, the poster child for the AI revolution,
0:49
Ejaaz: the stock that has made so many investors so wealthy over this run,
0:52
Ejaaz: is now in the crosshairs. This is the largest short position that Leopold has.
0:57
Ejaaz: And it's not obviously apparent when you're looking at the filing,
1:00
Ejaaz: because when you look at the portfolio of what he's most short,
1:03
Ejaaz: we see VanEck Semiconductor ETF is number one.
1:06
Ejaaz: And just beneath that is NVIDIA. Now, currently he has $1.5 billion of short exposure to NVIDIA.
1:12
Ejaaz: And this comes through the form of a put.
1:14
Ejaaz: And those who are not familiar with it, a put basically just gives Leopold the
1:18
Ejaaz: option, but not the obligation to sell the underlying asset at a predetermined
1:22
Ejaaz: price. So he basically buys the right to sell NVIDIA stock at a higher price should it go lower.
1:26
Ejaaz: Now, there is a $2 billion position sitting just above this,
1:29
Ejaaz: which is a stock that most people may not have heard before.
1:32
Ejaaz: The ticker is SMH, and it goes by the name of VanEck Semiconductor ETF.
1:36
Ejaaz: Within this ETF, I was looking through the holdings, and the largest holding
1:40
Ejaaz: is actually NVIDIA at 20%, which means if you combine the top two shorts,
1:45
Ejaaz: you get a $1.9 billion short position on NVIDIA.
1:49
Ejaaz: And this is probably disappointing to a lot because everyone seems to believe
1:53
Ejaaz: that NVIDIA is on a one-way trajectory north, but Leopold seems to think otherwise.
1:57
Ejaaz: In addition to this position, we have Broadcom, Oracle, AMD,
2:01
Ejaaz: Micron, ASML, Intel, Corning,
2:04
Ejaaz: These are all short positions now. And what you'll know is that,
2:06
Ejaaz: I mean, Intel, one of the ones that he made his bread and butter on,
2:10
Ejaaz: Intel made him more money than any stock in, I think, the portfolio's history.
2:14
Ejaaz: He is now short on Intel. And these are all new positions. He's short on Broadcom.
2:18
Ejaaz: For those not familiar, Broadcom is the company that is responsible mostly for
2:22
Ejaaz: building out OpenAI's project Stargate.
2:24
Ejaaz: That means he's essentially pulling out a short position on OpenAI and Project Stargate.
2:28
Ejaaz: So there's some concerning names here if you've been bullish on the AI market
2:31
Ejaaz: for a while, even something like Corning, the optical glass company.
2:35
Ejaaz: This has been a big kind of beta play after the semiconductor trade.
2:39
Ejaaz: And he's pulled up a big short position on this. So there's a lot of shorts
2:42
Ejaaz: that are coming on the market.
2:44
Ejaaz: There's, like you said, $8 billion of short exposure. That's 40 times more than
2:48
Ejaaz: the fund was worth just 18 months ago. So this is a huge position he's taking.
2:51
Josh: Yeah, it's extremely aggressive. And it becomes more apparent when you realize
2:55
Josh: that his entire fund thesis was based on a 64-page essay that he wrote called
3:01
Josh: Situational Awareness.
3:02
Josh: And the core thesis, if you remember, Josh, is a big bet on semiconductors,
3:06
Josh: specifically that compute flops will increase on multiple orders of magnitude over the next decade.
3:12
Josh: This explicit swing trade that he's made, this $8 billion short position,
3:17
Josh: is effectively a bet against that now. So it either indicates one of two things.
3:21
Josh: One, he thinks that the market is too crowded for this particular trade,
3:25
Josh: and so he's expecting there to be short-term volatility in downwards pressure on price.
3:30
Josh: Or he just believes something's broken in his thesis and he hasn't spoken about what that might be.
3:35
Josh: Now, not all is lost. If you look on the right side of this chart that we're
3:40
Josh: showing, there is a bull book as well.
3:43
Josh: So he does hold still massive positions in stock equity positions for specific
3:47
Josh: types of companies, as well as taking on call options as well.
3:51
Josh: So let's look at what he's positive on.
3:54
Josh: So CallWeave, he's maintained his position. And CallWeave has been one of his
3:57
Josh: biggest data center or neocloud investments for the longest time,
4:01
Josh: since the start of the fund, actually.
4:02
Josh: And he's taken levied bets on CoreWeave in many different ways through his own
4:06
Josh: private investment or acquisition of Core Scientific, which helps CoreWeave do its thing.
4:11
Josh: So for those of you who aren't familiar, CoreWeave is basically a neocloud that
4:15
Josh: creates and sets up GPUs and provides them to the biggest AI labs.
4:20
Josh: They've signed multi-billion dollar deals with the likes of Meta,
4:23
Josh: Anthropic, and the likes of that. And then if you look just below that, Bloom Energy.
4:28
Josh: This was his biggest swing trade, our fan favorite of last quarter.
4:33
Josh: Bloom Energy creates these portable gas turbines, which you can kind of like
4:36
Josh: fly into wherever your data center is and generate energy.
4:39
Josh: Of course, one of the biggest constraints for AI data centers right now is that
4:42
Josh: you have all these fancy GPUs, but you can't power them up because the energy
4:45
Josh: grid that is currently here in the US does not work. It's not really effective.
4:49
Josh: So you need to kind of have supplemental resources.
4:51
Josh: That is Bloom Energy. He hasn't exited this position, but he did trim off a
4:56
Josh: cool $1 billion. dollars.
4:57
Josh: And to be honest with you, I don't blame him. His position went from,
5:01
Josh: I believe, $800 million to about $2.5 billion potentially over the last three months.
5:06
Josh: So it makes sense that he's taking some money off, but he's still maintaining
5:08
Josh: about just over a billion dollars worth of Bloom Energy stock specifically.
5:12
Josh: And then if you look below this, he's increased a bunch of different companies.
5:16
Josh: CleanSpark, he's increased, Riot Platforms, Applied Digital, and Iron.
5:20
Josh: Now, if these names seem a little familiar, that's because they play in the
5:24
Josh: same NeoCloud market as CoreWeave itself.
5:27
Josh: So he's really doubling down on data centers and NeoCloud specifically.
5:31
Josh: He's observed that the likes of Anthropic and OpenAI are releasing newer models
5:35
Josh: and that compute scaling laws are just continually increasing.
5:38
Josh: So his big bet is that GPUs is
5:40
Josh: still needed, but right now it's a delivery function that they're facing.
5:44
Josh: And these companies solve that versus the actual GPU manufacturer,
5:48
Josh: which is why I guess he's short NVIDIA, Broadcom, and all the likes. So interesting to see.
5:52
Ejaaz: Yeah, this is a new narrative trade that we have forming, where we're kind of
5:55
Ejaaz: moving away from the semiconductors into more of that infrastructure,
5:59
Ejaaz: into the power, into the data centers, into the memory.
6:02
Ejaaz: And he's very much doubling down what we saw last quarter, but doing so in a
6:05
Ejaaz: way where he's also getting short exposure to the companies that he thinks might not do so well.
6:09
Ejaaz: Now, it's important to note that this 13F filing is a snapshot.
6:12
Ejaaz: It is a single moment in time that is taken based on the previous quarter's
6:16
Ejaaz: trades. So the trades that are in this 13F filing, the holdings in there,
6:20
Ejaaz: are from January 1st to March 31st. This is basically where he ended the quarter.
6:24
Ejaaz: And Leopold has been right pretty much every single time.
6:28
Ejaaz: And we've seen his portfolio grow from $220 million to that,
6:32
Ejaaz: what, $13.7 billion in notional value currently.
6:35
Ejaaz: But there are some things that he might be getting wrong. When I go back to
6:38
Ejaaz: that shortlist and I think about the companies that he shorted,
6:41
Ejaaz: AMD is one of those large shorts.
6:43
Ejaaz: AMD is up 74% in the last month. And he shorted it.
6:47
Ejaaz: So he picked perhaps one of the most expensive moments to bet against this rotation,
6:50
Ejaaz: but nonetheless, he thinks that the rotation is happening.
6:53
Ejaaz: So is it a timing thing? Is it a general thesis thing?
6:57
Ejaaz: Another one that was surprising is ASML.
6:59
Ejaaz: I mean, as far as I'm concerned, ASML is still the only company that can do lithography.
7:04
Ejaaz: It's a 100% monopoly on these chips, and he's shorting that.
7:08
Ejaaz: So clearly, the thesis really is strongly presented towards memory and power
7:13
Ejaaz: and infrastructure over the semiconductors. And I think it's just noteworthy to mention.
7:17
Ejaaz: Now, we have these two charts, the book by the numbers that shows the stock
7:20
Ejaaz: only positions as well as the top options positions.
7:23
Ejaaz: Maybe we want to walk through that briefly just to do a little trace over of
7:26
Ejaaz: what he currently holds and where.
7:27
Josh: Well, I think what actually might be more useful, Josh, is if we walk through
7:31
Josh: like what his thesis might be for all of these positions, right?
7:34
Josh: Because these are pretty aggressive, right?
7:35
Josh: You've got like, why is he doing this? We've got like a massive short position, $9 billion.
7:40
Josh: That is not a small like number. And then we have this like small,
7:43
Josh: weirdly bullish position. but we're unsure because like they're just a bunch
7:46
Josh: of near clouds and power companies which we haven't really heard of like are
7:49
Josh: these good are these bad so here's my take.
7:52
Josh: He's doing a bi-directional trade here for his thesis, and that is he is short silicon.
8:00
Josh: So he thinks it's an overcrowded trade. He thinks GPU designers such as NVIDIA,
8:05
Josh: Broadcom, as well as maybe manufacturers of the chips themselves,
8:08
Josh: TSMC, they're all like overcrowded trades right here. I don't think he thinks
8:12
Josh: he's bearish those things.
8:13
Josh: I just think that he thinks that they're overvalued right now.
8:16
Josh: And then conversely, he's very long power. He understands data centers and GPUs,
8:22
Josh: unlike nobody else in this entire market.
8:24
Josh: He has researched these things for goodness knows how long. And so he,
8:28
Josh: of all people, will know where that next constraint is.
8:31
Josh: And obviously, he thinks it's power, energy.
8:34
Josh: He doesn't think there's enough energy or ways to get this power and energy to the GPUs itself.
8:39
Josh: So maybe it's not that he's explicitly bearish on the semis specifically,
8:42
Josh: but he thinks that his money is better spent chasing that next constraint.
8:48
Josh: And he's expressed that as not just power, by the way, it's memory as well.
8:52
Josh: He doubled down on SanDisk as well, which, by the way, is up like 40,000% over the last year.
8:58
Josh: So you would think that if any trade was overcrowded, it would be SanDisk.
9:02
Josh: But obviously, he sees something that we haven't.
9:04
Josh: SanDisk is famous for creating a specific type of memory known as NAND flash.
9:08
Josh: Which allows you to kind of store temporary memory for AI models.
9:12
Josh: Like when you talk to an AI model, it needs to store temporary memory about
9:15
Josh: you so that he can remember stuff and recall stuff when you're conversing with it.
9:19
Josh: That is explicitly something that SanDisk provides.
9:22
Josh: So I think that he isn't necessarily bearish, the GPUs.
9:25
Josh: He's just short-term thinking that it's an overcrowded trade and his money's
9:28
Josh: better spent on things like power and memory.
9:31
Ejaaz: And now I'm wondering, is he bullish or bearish on the market as a whole?
9:35
Ejaaz: Because I mean, this is the first time in the fund's history where the short
9:38
Ejaaz: side of the book is actually larger than the long side in terms of notional
9:42
Ejaaz: value and exposure that they have.
9:44
Ejaaz: And this is a really stark difference for someone who's been really up only and long only.
9:49
Ejaaz: And when I was first evaluating this, I was wondering, well,
9:51
Ejaaz: is this just a hedge? Is this protecting his investments because they've gone up so much?
9:55
Ejaaz: Maybe he's just locking it in and he's kind of protecting his downside.
9:58
Ejaaz: But if it was a hedge, you'd really
10:00
Ejaaz: only expect kind of smaller positions sized to offset the long book.
10:04
Ejaaz: And we saw this last quarter where he had some hedge positions,
10:06
Ejaaz: but it was mostly a hedge.
10:08
Ejaaz: It wasn't a directional bet. But now that the puts are larger than the longs,
10:12
Ejaaz: it's kind of a directional bet on the market going down.
10:14
Ejaaz: So it seems like this weird pseudo thing where he expects the AA market to perhaps go down.
10:20
Ejaaz: Even as a result of that, some of these things, the memory, the infrastructure,
10:24
Ejaaz: the energy will continue to go up. And that's the bet.
10:27
Ejaaz: So I wonder how that impacts the broader market as a whole, because it puts
10:30
Ejaaz: him in this like weird juxtaposed position where the market goes down,
10:34
Ejaaz: but yet some positions will not be going down. Does that make sense?
10:37
Josh: We actually have some proving points around that, because I think you're touching
10:40
Josh: on something which is basically uncertainty.
10:42
Josh: He doesn't know whether in some cases he's right or whether the market will
10:46
Josh: go up and down. and you see that with he's matched a bunch of his put positions
10:50
Josh: with call positions as well aka.
10:53
Ejaaz: This is a great chart yeah
10:54
Josh: He's trading a bi-directional book so what that
10:57
Josh: means is uh in typical kind of like hedge fund manner mannerisms if you don't
11:02
Josh: know where the market is going to go whether it's going to go up or down you
11:06
Josh: hedge positions and you can cream off profit from the premiums that you make
11:10
Josh: between these positions so let's say you take out i'm just making this up like
11:14
Josh: a $10 million put position on one company,
11:17
Josh: you can take out the equivalent on the other side and then like just earn from
11:20
Josh: the margins between those different positions.
11:22
Josh: If the price goes up or the price goes down, you still get paid premiums,
11:25
Josh: right? It's known as like a collar trade specifically.
11:27
Josh: So he's done that on four companies, the biggest one being Micron.
11:31
Josh: And if he's bullish Sandisk memory, I don't understand how you would also be
11:35
Josh: bearish from a thesis level on Micron, which is like the biggest US play.
11:39
Josh: You know, Leopold is a purist, I believe.
11:41
Josh: And so he's very bullish American stocks. That's why he made his biggest amount
11:44
Josh: of money from the Intel trade. He's doing it with Boom Energy, NVIDIA and the like.
11:48
Josh: So it would seem weird that he's like taking out a short position on Micron.
11:52
Josh: But the way I understand it is he's doing this as a flat trade.
11:55
Josh: He doesn't know which way it's going to go.
11:56
Josh: He does believe the market is overcrowded. He does believe long term it's going
12:00
Josh: to do very well. But he can't play around with, you know, a crazy billion dollar swing trade.
12:04
Josh: So he's decided to hedge the market. And I think that's pretty smart, actually.
12:08
Ejaaz: Yeah. And I guess you could kind of reduce this down into four key claims to this new thesis.
12:12
Ejaaz: This is the new Leopold thesis. The first one being that the bottleneck has
12:16
Ejaaz: moved from chips to electrons. And we have that.
12:19
Ejaaz: We kind of know that a lot of chips are available.
12:22
Ejaaz: The problem is figuring out where to plug them into.
12:25
Ejaaz: And we see that with the most recent deal that was announced between SpaceX
12:28
Ejaaz: and Anthropic, where Anthropic is so desperate for compute, they're willing
12:32
Ejaaz: to partner up with their rivals in order to get it. That is not a matter of
12:36
Ejaaz: not having enough chips.
12:37
Ejaaz: It's a matter of not having the correct infrastructure to deploy these chips at scale.
12:41
Ejaaz: The second claim is that chip valuations are priced for a world that doesn't really exist anymore.
12:45
Ejaaz: That ETF, the SMH ETF that we mentioned earlier, it's up 66% year to date.
12:50
Ejaaz: Meanwhile, Intel is up 200%. So while the market is pricing in a world where
12:55
Ejaaz: every name and semis benefits equally from this AI demand, Leopold is taking
12:59
Ejaaz: account of that. He's saying, that's not how this works.
13:02
Ejaaz: There are winners and there are losers. And the early winners are the ones that
13:04
Ejaaz: are going to keep on winning. And he's going to continue to pursue that as far as he could take it.
13:09
Josh: I just noticed something crazy as well, Josh.
13:12
Josh: If we go back to these long positions that he's taken.
13:17
Josh: So he's maintained his core position and he's doubled down on a bunch of neoclouts, right?
13:22
Josh: These neoclouts, these companies stand to benefit from the exact thesis that
13:28
Josh: he's trading with this new portfolio.
13:30
Josh: So let's say that semi stocks go down, right?
13:34
Josh: Their stocks would also go down, right? Because they own the GPUs.
13:37
Josh: But CoreWeave and these other companies own something else that NVIDIA currently
13:40
Josh: doesn't have, which is...
13:42
Josh: The power access. Remember, he invested in a bunch of these NeoClouds,
13:47
Josh: not just because they can run GPUs.
13:49
Josh: That's something that any data set it could do. You just need capital to do it.
13:51
Josh: But more importantly, they have the licenses and access to existing energy grid
13:56
Josh: infrastructure that can serve these GPUs.
13:58
Josh: So he's playing both sides of the trade pretty intelligently through just a
14:02
Josh: single company that can express both his interest in the power trade,
14:07
Josh: but also his bearishness on the semis trade as well.
14:10
Josh: Like he can have a win-win. And that makes sense because that's the companies
14:14
Josh: that or type of companies that he's doubled down on.
14:16
Josh: It's exactly these data center neocards that have access to power.
14:19
Josh: It's a pretty smart trade.
14:21
Ejaaz: And he's also doubled down on this fun little Easter egg on where you can actually
14:25
Ejaaz: get this power and get this grid capability.
14:27
Ejaaz: And those are Bitcoin mining companies. We talked about this briefly last quarter,
14:30
Ejaaz: but he's going big on them again.
14:32
Ejaaz: And this year, US Bitcoin miners are going to approximately put 30 gigawatts
14:38
Ejaaz: of interconnected power capacity online.
14:40
Ejaaz: That's roughly, I mean, for comparison, that's roughly the total amount of Microsoft,
14:44
Ejaaz: Google, Amazon, and Meta combined in what they announced.
14:47
Ejaaz: So this is a tremendous amount of data centers that they're putting online that
14:50
Ejaaz: everyone's going to need.
14:51
Ejaaz: And because people are kind of pivoting from Bitcoin to AI, they already have
14:56
Ejaaz: a lot of the critical infrastructure. They have the power.
14:58
Ejaaz: They have the data center's size. They have it built out.
15:02
Ejaaz: All they need to do is swap in new chips that are built for AI,
15:05
Ejaaz: and they're on their way. And that is a really unique, interesting case that
15:09
Ejaaz: I don't think I've seen a lot of people explore other than Leopold.
15:12
Ejaaz: It's just taking the Bitcoin pivot, the crypto pivot. A lot of Bitcoin miners,
15:15
Ejaaz: they're there to follow the money.
15:17
Ejaaz: And when the money's in AI and they could put 30 gigawatts online in a single
15:20
Ejaaz: year, that's a huge amount.
15:22
Josh: Yeah, when I zoom out from this, right, everything we've discussed so far,
15:25
Josh: there's like a clear view that he's taking here, which is he's doubling down
15:31
Josh: on physical infrastructure.
15:33
Josh: He doesn't believe that can get commoditized.
15:36
Josh: What he's saying, and this is a big statement, is he thinks the design layer
15:41
Josh: of semiconductors, the chip side of things, is overcrowded.
15:45
Josh: Now, may I remind everyone, NVIDIA doesn't actually make the chips.
15:48
Josh: They're a design company. They create the design and they send the blueprints
15:52
Josh: to this company in Taiwan called TSMC, and they actually manufacture and build
15:56
Josh: the chips for them, right?
15:58
Josh: Broadcom does the same thing. Intel creates CPUs and GPUs. AMD as well.
16:02
Josh: These are two companies that he's short on this recent filing.
16:06
Josh: But again they create the designs for these things
16:08
Josh: they don't actually build the thing now intel and amd's intention is
16:11
Josh: to eventually do this but they haven't got the necessary factories or infrastructure
16:15
Josh: to be able to do this that's their plan in the next like five years so he's
16:19
Josh: making an explicit bet which is like the design space for chips is overcrowded
16:23
Josh: but the hardware infrastructure layer is where all the money is going and one
16:27
Josh: thing that they need as a substrate more than anything is power and so he's making that bet.
16:31
Ejaaz: Yeah. Okay. So we have this one section that talks about where the trade breaks,
16:35
Ejaaz: where this thing can start to break down.
16:37
Ejaaz: Now I mentioned earlier, AMD, he was short on, it's up 75%. That's got a sting.
16:42
Ejaaz: Is this correct? And we have a few things listed here on where it breaks.
16:45
Ejaaz: The first being around Nvidia, the largest short position through these two
16:49
Ejaaz: holdings that he has of $1.9 billion.
16:52
Ejaaz: And it could break in the sense that Nvidia's moat is actually stickier than he thinks.
16:57
Ejaaz: So currently he's betting on the fact that Nvidia is going
16:59
Ejaaz: to become kind of commoditized as it relates to chips likely that
17:03
Ejaaz: other companies like google and amazon through their tpus or
17:05
Ejaaz: their trinium chips are going to slowly start to chip away at
17:09
Ejaaz: the nvidia monopoly and the reality is
17:12
Ejaaz: that that may not be entirely true when you
17:14
Ejaaz: see a lot of the purchase orders coming in when you look at the the margins that
17:17
Ejaaz: they have around 80 on these gpus a lot
17:20
Ejaaz: of the volume is still coming into nvidia and
17:23
Ejaaz: a lot of that is due to this thing called kudo which is the platform lock-in
17:26
Ejaaz: it's the software stack that runs on top of this hardware and
17:29
Ejaaz: it's very custom it's very kind of niche and
17:32
Ejaaz: the people that can build for it and there's a world in which that becomes a
17:35
Ejaaz: pretty strong molt a moat in which people who are investing
17:38
Ejaaz: in nvidia they don't want to leave people who are building
17:41
Ejaaz: up these data centers it's just easy because they built it before and building
17:44
Ejaaz: custom infra for all these new chips is going to be complicated is that
17:47
Ejaaz: true or not we don't know anthropic is kind
17:50
Ejaaz: of taking the route of it not being true they've partnered
17:53
Ejaaz: with amazon for um for tranium chips they
17:56
Ejaaz: partnered with google for tpus and they're using nvidia but
17:59
Ejaaz: then you see a company like xai and colossus their entire data
18:02
Ejaaz: center is purely nvidia gpus and just workhorses and they're taking the new
18:06
Ejaaz: blackwell chips and they're building them up as fast as they can and they're
18:08
Ejaaz: very much leaning into that coup de moat so it's something that we're gonna
18:11
Ejaaz: have to see this is one of the thesis that that might play out but it could
18:14
Ejaaz: be a little difficult and i mean again nvidia is the most valuable company in
18:17
Ejaaz: the world this is a big company to start to fall apart now
18:21
Josh: Yeah, I mean, we have NVIDIA GPUs that are six to eight years old that are being
18:24
Josh: rented out a year in advance of their contract expiring, right? And people are paying.
18:28
Ejaaz: For more value than they were years ago. So the old H100s from years ago are
18:32
Ejaaz: actually worth more today than they were two years ago. That's unbelievable.
18:36
Josh: I mean, Leopold's trading stock kind of reminds me of another trader that we
18:40
Josh: spoke about a few months ago that got burned pretty badly, Michael Burry,
18:43
Josh: who went incredibly perish on NVIDIA right at the point that the stock absolutely set.
18:49
Josh: So I hope the same thing doesn't happen to Leopold.
18:51
Josh: But to kind of like also pick apart at some of the other kind of like gaps in
18:56
Josh: his potential thinking or risks here is Leopold runs a hedge fund, right?
19:01
Josh: Situational awareness fund isn't a VC fund, which is typically like long only.
19:05
Josh: It's actually kind of rare to see a hedge fund go super long as aggressively as he did, right?
19:10
Josh: So the point being is what you see or what we're speaking about in the 13F filings,
19:14
Josh: which is something that he has to submit, his trade breakdown,
19:17
Josh: his investment portfolio, every three months, may not be the latest and greatest
19:22
Josh: trades that he's currently made.
19:23
Josh: In fact, today, as we're speaking about this, after he's filed the report at
19:26
Josh: the end of March, he could have changed all these trades.
19:28
Josh: He could have done completely something different, right? Another thing I think about is...
19:34
Josh: When did he take these put positions? When did he take these specific positions?
19:38
Josh: They could have been at the start of the year.
19:39
Josh: And like, you know, the fund could have suffered pretty badly.
19:42
Josh: Now, the obvious evidence to prove that this isn't the case is the fact that
19:45
Josh: the value of his fund went from $5.5 billion three months ago to $14 billion.
19:50
Josh: So the point is, he's made money. He's taken off money from the top.
19:53
Josh: And it's important to point out that these put positions, these call positions,
19:57
Josh: these are kind of like levered bets.
19:59
Josh: So when we talk about an $8 billion put position in total,
20:02
Josh: he's typically probably only put up like a billion dollars
20:05
Josh: worth of actual capital right now he's also paying
20:08
Josh: a lot of fees and premiums on that so it's like a short-term trade
20:12
Josh: again i must say like he might have existed some of these trades already so
20:15
Josh: if you're reading this if you listen to this and you're thinking oh my god i
20:18
Josh: need to change my entire stock uh portfolio remember you may not necessarily
20:22
Josh: be trading like him you're not doing short-term or high frequency trades you
20:25
Josh: might be in it for the long term and that's a very different type of kind of
20:28
Josh: like approach and maybe josh this
20:30
Josh: is a good time to talk about what the retail audience can do about this and
20:33
Josh: like what the actual thesis might be and where you might want to invest your money going forward.
20:38
Ejaaz: Yeah. So we actually have some data to back this up through Polymarket,
20:42
Ejaaz: which shows us that things might not be as bad as we're perceiving them because
20:46
Ejaaz: again, retail is different than what he's doing.
20:49
Ejaaz: I mean, Leopold is a trader. If you're a retail investor, things are a little bit different.
20:53
Ejaaz: If you think that the AI bubble is going to pop and that's what this implies,
20:56
Ejaaz: is according to Polymarket, that's sadly mistaken.
20:59
Ejaaz: There's only a 24% chance of the AI bubble bursting by December 31st of this year.
21:04
Ejaaz: Very low probability. There's also a second market that I wanted to highlight,
21:07
Ejaaz: which shows the largest company by the end of May this month in a few more weeks.
21:11
Ejaaz: Now, currently, NVIDIA is the largest company in the world, and they're pretty
21:15
Ejaaz: closely followed by Google.
21:17
Ejaaz: The reality is, though, according to Polymarket, there's still a 93% chance
21:20
Ejaaz: that it stays this way, that NVIDIA is going to continue to take the crown throughout
21:24
Ejaaz: the course of this month, And I think that's a testament to...
21:27
Ejaaz: A little bit less volatility than he may be implying with these earnings and with this 13F filing.
21:32
Ejaaz: So again, it's important to note that this is last quarter's news.
21:35
Ejaaz: The tides have turned pretty considerably.
21:37
Ejaaz: We don't know what's happened over the last couple of months that he's been
21:40
Ejaaz: trading, but I think it's a good testament to the fact that things aren't quite
21:44
Ejaaz: as bad as it may seem on the surface.
21:46
Ejaaz: He's just applying a new strategy that kind of alters the trajectory of this portfolio.
21:51
Ejaaz: And thank you to Polymarket for showcasing these charts. So yeah,
21:53
Ejaaz: I guess we should get back to the question of how do you as a retail investor
21:57
Ejaaz: adjust to this what is your strategy how do you navigate this are you bullish
22:01
Ejaaz: are you bearish you just do you have any ideas on like kind of your your gut
22:04
Ejaaz: take on how you personally plan to position yourself or how people should consider
22:07
Ejaaz: positioning themselves around this new information so
22:10
Josh: I'll give you two answers if i was someone who is kind of like new into this
22:14
Josh: market um and is just reading leopold's 13f filing and are basing their trading
22:20
Josh: decisions off of that, you would be tentative.
22:24
Josh: This isn't a time to go crazy and go all in on a single stock.
22:28
Josh: I would never advise that anyway.
22:30
Josh: But the point is, I think he's being conservative for a reason,
22:33
Josh: which is the market on average has probably run up a couple hundred percent over the last two years.
22:38
Josh: And that in a regular stock market is absolutely huge. If you look at the major
22:42
Josh: increases in the S&P 500, it has primarily been through five top companies in
22:47
Josh: the Mac 7, which have all invested extremely heavily and aggressively in AI.
22:52
Josh: And that money flows downstream into a lot of these companies that we've spoken about already.
22:56
Josh: So he may just be suggesting that it is an overcrowded trade,
22:59
Josh: so just be cautious and careful. That being said,
23:01
Josh: I always have a bullish cap on, Josh. And where my mind goes to right now is
23:06
Josh: in the power and energy side of things.
23:09
Josh: Now, I'm aligned with Leopold on the Bloom Energies and the data centers side of things.
23:13
Josh: In fact, I think it's genius that even if you invest in some of these top neocloud
23:17
Josh: providers who are signing, by the way, multi-billion dollar deals with Anthropic
23:20
Josh: and Meta, you still get to benefit if the semiconductor space goes down because
23:24
Josh: they own the power capacity.
23:25
Josh: That's something new that I've learned from this that I'm feeling extremely bullish on, right?
23:28
Josh: So that's something that I might pop my money in, right? equally so,
23:32
Josh: I'm looking at some of his short positions on the likes of companies such as
23:36
Josh: Corning, which is also a bottleneck, right? It's on the optic side of things.
23:41
Josh: And NVIDIA just signed a massive multi-billion dollar partnership with them,
23:44
Josh: and he's short on them. So he's kind of picking and choosing which bottleneck that he wants.
23:49
Josh: I'm kind of more bullish on power at this point, but I don't know if he's completely
23:52
Josh: nailed it when it comes to some of these optical fiber networks and some of
23:56
Josh: the other short positions that he has. I don't know. What about you?
23:58
Ejaaz: Yeah, I think that, well, the general trend through all of this is,
24:01
Ejaaz: for me at least personally, the way I think about navigating AI is that the
24:04
Ejaaz: two most powerful, two most important things
24:07
Ejaaz: our energy and the physical movement of these atoms, I think the physical world
24:12
Ejaaz: is really difficult and complicated and moves much slower than the world of software.
24:15
Ejaaz: And if anyone has a unique advantage around manufacturing, around actual construction,
24:20
Ejaaz: around gaining the permits to put these things online, that is a huge structural advantage.
24:23
Ejaaz: The second one is the energy. Everyone is desperate for energy.
24:26
Ejaaz: Nobody wants to be the bad guy in kind of absorbing the data centers,
24:30
Ejaaz: using data centers to absorb energy from normal people where they go into cities
24:34
Ejaaz: and they kind of pull off the grid and energy prices go higher.
24:37
Ejaaz: Everyone wants these two things. They want to be able to physically manufacture
24:39
Ejaaz: things in a way that is cheap, easy, fast, efficient.
24:43
Ejaaz: They want to be able to have abundance of energy. If there's a company that
24:46
Ejaaz: has anything that slightly resembles a monopoly in either of these two categories, it's a huge win.
24:51
Ejaaz: And it's probably something to invest in because they're durable.
24:54
Ejaaz: On the chip stack, there's a lot of competition.
24:56
Ejaaz: There are a lot of people competing directly with NVIDIA. We see it with Amazon and their chips.
25:01
Ejaaz: We see it with Google and their TPUs. And there's a lot of other companies like
25:04
Ejaaz: Cerebris, we mentioned last week, had their IPO and they have this brand new novel architecture.
25:08
Ejaaz: There's a lot of competition there that might flatten margins a little bit.
25:11
Ejaaz: Granted, they're still incredibly high, but there is a chance.
25:14
Ejaaz: Now, in terms of what to look for moving forward, because these are a few things
25:18
Ejaaz: that I'm going to be interested in, kind of fact-checking Leopold,
25:21
Ejaaz: seeing if he's actually doing as well as he performs.
25:23
Ejaaz: NVIDIA has their earnings coming up pretty soon, May 28th.
25:27
Ejaaz: And if they guide above $78 billion dollars for the next quarter there's a pretty
25:31
Ejaaz: good chance those puts get get crushed um they might not be doing too well so
25:35
Ejaaz: we have these earnings reports that are coming towards the end of this month
25:38
Ejaaz: we have amd has an analyst day in 2026 we have some pretty serious bloom energy
25:42
Ejaaz: deployment milestones that we're going to look into
25:45
Ejaaz: Those are going to be kind of checkpoints that we could then cross-check against
25:48
Ejaaz: Leopold's portfolio to see if it is accurate.
25:50
Ejaaz: But I think thematically, the
25:52
Ejaaz: idea of energy and infrastructure are two that are not going to go away.
25:54
Ejaaz: And when I'm investing and when I'm considering allocating my portfolio,
25:57
Ejaaz: those are the two categories that I'm probably most interested in.
26:00
Josh: Well, I probably then want to do a little bit of a victory lap for us because
26:04
Josh: about a week and a half ago, maybe two weeks, you know, I don't want to brag too much.
26:09
Josh: We did an episode that broke down where some of the top AI investment trades
26:13
Josh: might potentially be in the future.
26:16
Josh: And we went down this infrastructure stack, right?
26:19
Josh: And we walked all the way from model labs flowing down to hyperscalers and AI
26:24
Josh: platforms, such as the Mac 7 that I mentioned earlier, as well as these GPU semiconductors.
26:29
Josh: And the point that we made on this episode was that the money is going to flow
26:32
Josh: from these GPUs and semiconductor trades, so like the likes of NVIDIA,
26:36
Josh: AMD, Broadcom, these are all companies, which by the way, he took out the massive shorts on,
26:40
Josh: all the way down into the memory and storage layer and the power and infrastructure layer.
26:45
Josh: And these are the companies where, you know, overall, he's going pretty bullish
26:49
Josh: on, right? He's expressing it through NeoCloud's data centers.
26:51
Josh: He's expressing it through SanDisk and specific kind of like memory verticals
26:54
Josh: and power infrastructure companies.
26:56
Josh: But the point is, we potentially may have called this earlier on,
27:00
Josh: and we're just following along at Limitless where these different constraints
27:04
Josh: and bottlenecks are, because it's very important to understand that AI isn't a one-to-one trade.
27:09
Josh: You can certainly buy and hold a company such as media and maybe you're better
27:13
Josh: off over the next decade I think directionally that's probably going to be true
27:16
Josh: but you'd be remiss if you assume that it was just park your money in one sector and
27:22
Josh: you're good the point is the money is flowing through this into AI is like kind
27:26
Josh: of like a car you kind of like it ingests gasoline and like it uses it across
27:30
Josh: all its entire infrastructure and then comes out the other end as exhaust fumes
27:34
Josh: we are currently I don't know,
27:36
Josh: two-thirds of the way through this car, Josh? I don't know.
27:39
Ejaaz: We're making our way down the stack.
27:40
Josh: We're making our way down the stack. And I just want to point out that,
27:43
Josh: like, this isn't just, like, a thesis that we have, like, pulled out of thin air.
27:47
Josh: It's based on actual factual numbers.
27:49
Josh: Like, for example, memory prices are absolutely sky high right now.
27:53
Josh: It's gone up on an average of 3% to 500% across all the top memory manufacturers
27:57
Josh: over the last nine months.
27:59
Josh: And if you look at any of their capacity, they're booked out for the next year,
28:02
Josh: actually, until the end of 2027. So it's like a year and a half at this point.
28:06
Josh: So these are very real numbers. Now, whether more supply will come out,
28:10
Josh: whether more power generation kind of pops out of thin air, we don't know.
28:13
Josh: But directionally, the bet that he's making is in line with our thesis that
28:16
Josh: we have on the list. So that's pretty cool to see.
28:18
Ejaaz: And if you've been tuned in, yeah, you're up to date. You know all these things
28:21
Ejaaz: already. You're familiar with the AI stack. If you haven't seen this episode,
28:23
Ejaaz: we released it last week. It performed really well.
28:26
Ejaaz: So I would highly recommend going to check it out. We're going to continue covering
28:29
Ejaaz: this, monitoring the situation. We had the Cerebrus IPO.
28:33
Ejaaz: We now have Leopold's new filings. There's a lot of new coverage to talk about.
28:37
Ejaaz: We have some funny memes as well. This one from Nick Carter that is using Leopold
28:43
Ejaaz: as a joke that says, I don't want to play with you anymore.
28:46
Ejaaz: He's kind of throwing away the AI industry because he's sick of them.
28:51
Ejaaz: And this is a good one. The last thing Intel investors see before they panic
28:54
Ejaaz: sell. Poor guy, man. Intel bulls. Intel bulls. He turned on you.
28:58
Josh: I'm an Intel bull. He turned on me.
29:00
Ejaaz: He made billions of dollars and then he slammed the cell phone and he said,
29:02
Ejaaz: I'm done. I don't want you anymore. more.
29:04
Ejaaz: So we'll see. We'll be following it. I mean, over the next couple of weeks in
29:07
Ejaaz: particular, as we see these earnings reports roll out, as we start to see the
29:10
Ejaaz: market reaction to this filing and the new narratives wind shift over to memory,
29:15
Ejaaz: over to infrastructure and energy.
29:16
Ejaaz: We'll just continue to monitor the situation. So thank you so much for joining.
29:20
Ejaaz: I think that's a wrap on the 13F.
29:22
Ejaaz: We kind of now are fully up to date. We know the new positions.
29:25
Ejaaz: We know what he pulls on. We know what he's bearish on.
29:27
Ejaaz: He just, what's the prompt for everyone? How should they kind of think about
29:30
Ejaaz: navigating this as they leave this episode and go sit there and stare at their
29:34
Ejaaz: portfolio and ponder what changes to be made? Do I need to react based on Leopold?
29:38
Josh: So here's how I feel at the end of this episode, Josh.
29:41
Josh: And here's what I'm going to prompt people to do. How I feel is I'm the biggest
29:45
Josh: fan of Leopold. Don't get me wrong. I think he might have some stuff wrong here.
29:49
Josh: So what I want people to point out in the comments is what part of Leopold's
29:53
Josh: thesis do you disagree with?
29:56
Josh: And let us know why you disagree with it. Because I think, like,
29:58
Josh: I'm not going to speak on behalf of Josh, but I feel like a little unsettled,
30:02
Josh: and I'm unsure whether Leopold knows what he's doing.
30:04
Josh: In fact, I think given his trading breakdown, I think he doesn't know what he's
30:07
Josh: doing either. He's playing it safe.
30:09
Josh: So tell us what we're missing, and maybe Limitless will guess it or preempt
30:13
Josh: it before it actually happens.
30:15
Ejaaz: If you had to pick one thing that he's missing or he gets wrong,
30:17
Ejaaz: do you have any top choice?
30:19
Josh: NVIDIA. Why are you?
30:21
Ejaaz: I was going to say the same thing.
30:22
Josh: If NVIDIA goes down, all your stocks go down, dude. Like that's the way I see it. So yeah, NVIDIA.
30:28
Ejaaz: Yeah, 1.9 billion short on NVIDIA seems a little suspect. I'm a little confused
30:31
Ejaaz: what's going on there, especially because those margins are high.
30:34
Ejaaz: Everyone needs Blackwell. We're just starting to get the early versions of those
30:37
Ejaaz: Blackwell models. And if you'll remember, the first one that came out of it was Mythos.
30:41
Josh: Yes.
30:41
Ejaaz: Clearly, there's like a tremendous amount
30:43
Ejaaz: of value stored up in the NVIDIA infrastructure stack in the software.
30:47
Ejaaz: It is up only. It is the most valuable company in the world.
30:49
Ejaaz: And to not continue to bet on the winners seems like a losing strategy.
30:53
Ejaaz: But as always, we'll see.
30:55
Ejaaz: We'll check in. We will stay up to date and we will keep all of you updated
30:58
Ejaaz: in the loop every day as we follow this journey along the frontier of AI investing
31:03
Ejaaz: and all of the crazy technologies.
31:05
Ejaaz: So thank you all so much for watching. If you enjoyed this episode,
31:07
Ejaaz: don't forget to share with a friend.
31:08
Ejaaz: Don't forget to leave a comment on YouTube. perhaps give us a thumbs up and
31:12
Ejaaz: a five star review on your favorite podcast player
31:14
Ejaaz: With that, we're done. That's a wrap. You're now up to speed on Leopold.
31:17
Ejaaz: Yeah. Do with this information what you will.
31:20
Josh: Not financial investment advice at all. Yeah. All right. See you guys.
31:23
Josh: All right. We'll see you guys in the next one. Peace.