It’s been one of the most successful hedge funds over the last two years, Light Street Capital ended 2024 up 59.4 percent. The long/short fund focused on technology is in the heart of Palo Alto, Silicon Valley. It sits next to companies like Apple and Amazon. Today we investigate how Light Street Capital makes such good returns.
Glen Kacher, a Tiger Global alum, founded Light Street Capital Management LLC in 2010. His firm has large positions in companies such as Nvidia, Meta Platforms, and TSMC as just some examples. These investments have helped Light Street Capital deliver strong returns for its investors. In 2023 the firm also had a strong year, it made a return of 46 percent.
Last month Glen Kacher, Founder and CIO of Light Street Capital, spoke to CNBC about the market. The interview took place only a few days after Kacher posted on the X platform.
How is Light Street Capital Reacting to Trump’s Policies?
Kacher’s post highlighted how he felt that the U.S. administration might be “playing chicken with the global economy.” He went into more detail in the discussion with CNBC.
Kacher explained how his firm is looking to invest in industries, sectors, and companies that make products that are
- difficult to compete with or regulate
- faster to innovate than their competitors
He believes that semiconductor companies have declined in price since the beginning of the year. But he also knows that any successful AI business will have to purchase semiconductors to harness AI. Companies who don’t buy semiconductors will fall behind.
Kacher pointed at companies like AMD, Broadcom, and Nvidia as being critical for the development of microprocessors.
“Those are the hardest chips to make in the world,” Kacher shared. “So we want to own these companies. We want to own Taiwan Semiconductor (TSMC), the company that makes those chips. It’s impossible to avoid shipping those chips in from Taiwan. So I think that the sector will get treated well by the Trump administration.”
On the topic of the politics of the Trump administration, Kacher believes that the goal is the restoration of the U.S. economy. He sees that three things are being addressed:
- fixing government fraud and waste
- demanding more defence spending from allied nations
- reducing the unfairness in global trade
“The administration’s efforts come from a rational place,” Kacher explained. “The problem is that it’s the implementation that has been so off.”
He pointed to how the entire capital markets have felt the strain of the tariff announcements and how interest rates have been a concern. Kacher remains optimistic despite trade policy headwinds.
Which Companies Make up Light Street Capital’s Portfolio?
It was a quiet first quarter of this year for the team at Light Street Capital according to the Institutional Investor. The firm failed to register any new investments in data tracked by Crunchbase.
This week there has been some updates from Light Street Capital, as multiple news stories have broken on MarketBeat. Three updates were reported including:
- purchase of a new stake in shares of GDS Holdings Limited at a value of $18.6 million making up approximately 3.4% of Light Street’s portfolio. This was during the last quarter of 2024. GDS Holdings is a data center company, aligning with AI infrastructure
- Light Street lowered its holdings in Autodesk by 21.7% during the last quarter of 2024. This has reduced Autodesk to 2.8% of Light Street’s portfolio
- purchase of a new position in Workday during the last quarter of 2024 valued at $11.5 million. Workday makes up 2.1% of Light Street’s portfolio
Last January, in an earlier discussion with CNBC, the main positions of Light Street Capital were highlighted. These included Nvidia, Microsoft, Broadcom, AMD, Meta, Tesla, Alphabet, GitLab, Cellebrite, and JFrog.
Microsoft, AMD, TSMC, Nvidia and Broadcom is what Kacher coined as his “AI5 basket” of semiconductor and AI-infrastructure stocks. It is quite catchy, and the stocks also outperformed the Magnificent Seven in 2024.
Light Street Capital’s 59.4% return in 2024 underscores Glen Kacher’s knack for tech investing. By targeting AI and semiconductor leaders like Nvidia and TSMC, the firm has ridden the wave of innovation. Investors should watch Light Street for clues on the next tech frontier, especially as AI demand grows.
Author: Andy Samu
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