Norwegian star fund management firm Skagen AS is implementing divergent strategies on two of Asia's hottest artificial intelligence investment targets: it is persistently increasing its stake in Samsung Electronics, whose stock price has doubled this year, while simultaneously reducing its holding in Alibaba (BABA.US), which delivered the fund's largest gains last year. Fredrik Bjelland, who manages the $2 billion Kon-Tiki Emerging Markets fund, revealed that he has been consistently adding to the fund's position in Samsung Electronics throughout 2025, anticipating that demand for memory chips will remain robust over the next two years. Concurrently, as Alibaba's stock surged 73% last year, he is gradually scaling back this position—the e-commerce giant was the single biggest contributor to the fund's performance in the prior year. Bjelland believes that because investors are already fully aware of its AI capabilities, Alibaba's next phase of share price appreciation may be harder to achieve. With data center expansion fueling a chip shortage, memory chips are becoming a focal point for fund managers positioning for the next phase of the AI cycle. Bjelland stated that his strategy involves full allocation to companies directly driving AI development, such as memory chip manufacturers or TSMC, while cutting exposure to firms focused on the application layer, as their business models are "yet to be proven." "We have reduced our exposure to downstream players in the chain, including model builders and companies that need to fight for consumer attention," he said in an interview, "Positioning in AI assets further up the value chain potentially offers a more diversified and superior risk-reward profile." According to data, the Kon-Tiki fund achieved a 28% return in 2025, outperforming approximately 85% of its peer funds. As of the end of last December, the fund had allocated roughly 17% of its assets to TSMC (TSM.US) and Samsung, while its Alibaba holding accounted for just 2.5%, a significant drop from 7.9% a year earlier. Bjelland's confidence in Samsung reflects improved visibility in the memory chip market. As cloud service providers ramp up capital expenditure, capacity for many high-bandwidth memory chips this year is already fully booked. Although surging demand can sometimes precede a sharp downturn, he believes this risk will not materialize in the current or next year. Compared to competitors SK Hynix and Micron Technology (MU.US), Samsung's valuation offers more upside potential, "even if earnings have peaked—which I don't believe they have—the stock's valuation remains modestly low." The fund has also increased its stake in Hon Hai Precision Industry as another hardware sector bet. Bjelland pointed out that besides assembling iPhones and Macs for Apple, the Taiwanese company is securing more orders for AI server racks, which represent a higher-margin business. The increased allocation to AI hardware has largely come at the expense of reducing the Alibaba position. Bjelland noted that the Chinese company remains embroiled in a costly food delivery battle with Meituan, while substantial spending on delivery and AI initiatives limits the cash available for dividends and buybacks—a core part of the investment thesis for the stock. The reduction in Alibaba also allowed the fund to initiate a new position in JD.com in November. Bjelland believes the online retailer's current valuation—trading below the combined value of its cash, investments, and listed subsidiaries—has fallen to a level that cannot be ignored: "Investors are effectively getting the core consumer electronics and department store business, which has a 5% operating profit margin, for zero cost. We view this as an excellent risk-reward combination."
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