AI Trade Is Separating Wall Street’s Winners From Losers

The surge of artificial intelligence as a dominant investment theme is increasingly separating winners and losers across Wall Street. Hedge funds and professional investors are taking aggressive positions based on which companies they believe will benefit from the AI boom and which could be disrupted by it.

At Steve Cohen’s hedge fund Point72 Asset Management, one investment team reportedly generated hundreds of millions of dollars in profits by trading stocks tied to the AI ecosystem. The strategy focused on identifying companies likely to benefit from AI infrastructure spending—such as semiconductor, data center and cloud firms—while betting against companies seen as vulnerable to disruption.

Not every investor has benefited from the same theme. Some funds that positioned themselves against software companies expected to lose ground to AI-driven automation suffered significant losses. In one case, a smaller investment firm decided to shut down after its bets against software stocks backfired.

Market strategists say the divergence highlights how artificial intelligence is reshaping equity markets. Investors are increasingly separating companies into two camps: those poised to capture the economic gains of AI and those whose business models may face pressure as the technology spreads across industries.