Value Aligned Research Advisors falls 44% amid AI stock declines

A 44% monthly loss is the kind of number that makes portfolio managers physically ill. Value Aligned Research Advisors, the Princeton-based hedge fund manager overseeing roughly $20B in total assets, watched its flagship VAR AI Fund crater by that exact amount in July 2026, turning what had been one of the hottest funds in the AI trade into a cautionary tale about concentration risk. The silver lining, if you can call it that: the fund’s year-to-date performance still sits at 65% after the drawdown. Which means VARA’s investors are still comfortably in the green for 2026. What happened to VARA The VAR AI Fund’s collapse tracks with a broader selloff in AI infrastructure and chip-related equities that hammered the sector in July. After an extraordinary run, including 113% gains in 2025 and 90% returns through April 2026, the fund ran headfirst into a wall of selling pressure. Part of the volatility was exacerbated by competition from Situational Awareness, a rival fund whose activity added turbulence to an already jittery market. VARA’s portfolio, as reported in its 13F filing from March 31, 2026, stood at approximately $20.7B spread across dozens of holdings. Of that total, roughly...