RESEARCH
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No. 148
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The AI Trade That Cost $45 Billion
The index finished July almost exactly where it started, yet two sides of the biggest trade of the year moved about fifty points apart.
Jacob Radke
2 min read
Micron, CoreWeave, Adobe, Salesforce, and the S&P 500 from June 30 through July 31, 2026, rebased to the June 30 close.
Source · Yahoo Finance, prices through July 31, 2026
Infrastructure average
−28.3%
Micron and CoreWeave in July 2026.
Software average
+19.8%
Adobe and Salesforce in July 2026.
July spread
48 pts
Gap between the two AI trade legs.
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Charts
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The S&P 500 finished July down 0.1%, however a narrative change happened in the AI trade that took out a $45 billion hedge fund.
The trade is to own the companies building AI infrastructure and to avoid the enterprise software companies that AI is supposed to replace. Micron, which makes the memory chips that go inside AI servers, was up 188% on the year. Adobe was down 28% and Salesforce was down 30%.
Then in four weeks Micron fell 28.7% and CoreWeave fell 27.9%, while Adobe rose 22.1% and Salesforce rose 17.5%.
Memory is still scarce, compute is still scarce, capital spending guidance still went up, and what happens to enterprise software is undetermined. What actually happens with a trade that works for six months is it gets crowded (too many investors holding the same position), and crowded positions can sell off for no reason other than it ran out of buyers.
And last week that reversal cost a $45 billion hedge fund its entire stock portfolio.
Until next week,
Jacob
Sources & method
Fund reference: CNBC, July 30 and July 31, 2026; Bloomberg, July 30, 2026.
July index performance: Washington Times, July 31, 2026.
Written by
Jacob Radke
Partner, Wealth Advisor
Jacob writes the weekly charts. Jacob leads the firm’s platform, including trading, research, portfolio systems and technology. He also sits on the firm’s board and investment committee, and advises client families.
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