Blue Whale Growth Fund Targets AI Capital Spending, Holds NVIDIA and SK Hynix Among Top Picks

According to Stephen Yiu, manager of Blue Whale Growth Fund with $4.5 billion in assets under management, the simplest approach to AI investing is to follow capital spending rather than predict profitable companies. Yiu's strategy focuses on semiconductor supply chain companies directly benefiting from AI infrastructure investments.

Blue Whale's top holdings include Applied Materials, Lam Research, NVIDIA, SK Hynix, Lumentum, and Broadcom. Since inception in 2017, the fund has achieved approximately 19% annualized returns after fees, outperforming the MSCI World Index's 12.4% return over the same period. Yiu noted that NVIDIA, currently trading at a 22x estimated P/E ratio, remains undervalued given strong profit growth trajectories and substantial net cash reserves.