Balyasny and Verition report losses as AI stock selloff rattles hedge fund giants

The AI trade, which spent the better part of two years making hedge fund managers look like geniuses, finally bit back. Balyasny Asset Management and Verition Fund Management both posted losses in July as a broad selloff in artificial intelligence stocks punished funds with exposure to the sector’s high-flyers. Balyasny dropped 1.5% for the month, dragging its year-to-date return down to a modest 1.2%. Verition fared slightly better with a 1.1% decline, leaving it up 4.5% through the first seven months of 2026. The AI unwind hits harder than expected The July selloff was triggered by growing investor skepticism around the sustainability of capital expenditures from the so-called hyperscalers, the massive tech companies pouring billions into AI infrastructure. When doubt creeps into a consensus trade, the results can be ugly. Chipmakers and AI infrastructure plays bore the brunt of the rotation. Altimeter Capital Management fell 11% in July, a far steeper drop despite maintaining an impressive 34% gain for the year. The damage came from holdings like Taiwan Semiconductor Manufacturing Co., which slid 15% during the month, and CoreWeave, which cratered 28%. Balyasny saw this coming, ...