AI and Memory Chip Stocks Surge as Situational Awareness Completes Full Stock Liquidation

According to a report by Seeking Alpha, AI and memory-related semiconductor stocks rose sharply on Thursday (30th). Market observers speculate that the rally was triggered by the hedge fund Situational Awareness completing a full liquidation of its stock positions, thereby relieving selling pressure and prompting a rebound in the sector.

SanDisk (SNDK-US) surged over 25%; benefiting from the recovery in storage and memory stocks, Seagate Technology (STX-US), Western Digital (WDC-US), and Micron (MU-US) all rose more than 10%.

Other AI chipmakers also advanced. AMD (AMD-US) gained over 10%, while NVIDIA (NVDA-US), Marvell Technology (MRVL-US), and Broadcom (AVGO-US) posted solid gains.

Meanwhile, Arm Holdings (ARM-US) rose over 7%, partly due to better-than-expected earnings and guidance. Analysts noted that the UK-based chip designer has grown more confident in surpassing $1 billion in revenue from its Artificial General Intelligence (AGI) CPU by the 2028 fiscal year. The Arm AGI CPU is set to be the company’s first mass-produced chip specifically designed for agent-based AI workloads.

The sharp rally on Thursday—following steep declines in the prior two trading sessions—appears to lack clear fundamental drivers. However, some investors attribute the rebound to the $24 billion hedge fund Situational Awareness having exited all its equity positions.

The fund, founded by former OpenAI researcher Leopold Aschenbrenner, incurred significant losses on recent AI-related investments and has fully liquidated all its publicly traded stock holdings.

Notably, the sharp decline in shares of South Korean memory giant SK Hynix (SKHY-US) further widened the fund’s losses. SK Hynix recently raised $26.5 billion through the issuance of American Depositary Receipts (ADRs).

Reports indicate that Situational Awareness sold its entire public equity portfolio in a single transaction to Citadel Securities.

This marks a dramatic reversal in the fund’s performance. According to a letter to investors dated July 24, Situational Awareness had delivered a net return of 439% as of the end of June.

The fund reportedly used leverage to amplify returns, which exacerbated losses when the market turned.

Bloomberg reported that after the liquidation, Situational Awareness’s assets under management stood at approximately $10 billion—down from at least $20 billion in May, representing a 50% reduction.