Alex Sacerdote doesn’t chase trends. He positions ahead of them, then waits for everyone else to catch up. His firm, Whale Rock Capital Management, built a reputation doing exactly that — calling the cloud computing boom early, loading up on AI infrastructure before it was a consensus trade, and posting 54% returns in 2024 while most investors were still arguing about whether the AI rally had legs.

Now Whale Rock’s latest 13-F filing reveals five stocks Sacerdote was quietly buying in Q1 — and none of them are the household names you’d expect from a fund with a $10 billion AI thesis. No Nvidia. No Microsoft. Instead, Sacerdote is moving into the less-covered infrastructure layer: the test equipment makers, the semiconductor tool suppliers, the DevOps platforms — the companies that don’t make the headlines but don’t miss the upside either.

This matters because Whale Rock has a track record of being early and right. When the firm builds a new position, it’s not a diversification play — it’s a conviction bet built on thousands of management meetings and a research process that traces back to Sacerdote’s years as a Fidelity sector portfolio manager. These five stocks represent where one of the most closely watched technology investors on Wall Street thinks the next S-curve begins.

Who Is Whale Rock — and Why Does It Matter What They Buy?

Few hedge funds embody concentrated conviction investing quite like Whale Rock Capital Management. Founded in 2006 by Alex Sacerdote, the Boston-based firm built its reputation doing one thing exceptionally well: identifying massive technological shifts early and betting aggressively on the companies most likely to dominate them.

Sacerdote didn’t come from nowhere. Before launching Whale Rock, he spent years at Fidelity Investments as both an analyst and sector portfolio manager focused on technology stocks. Before Fidelity, he worked in technology, media, and telecommunications investment banking at Citigroup, and held an operating role at an internet advertising startup during the first dot-com era.

That background matters because Whale Rock has always operated less like a traditional diversified hedge fund and more like a specialized technology research organization that happens to manage billions of dollars. The firm focuses almost entirely on technology, media, telecommunications, software, semiconductors, internet infrastructure, and — increasingly — artificial intelligence. Over time, Whale Rock expanded into long-only and hybrid strategies, eventually growing into a multi-billion-dollar platform managing roughly $8 billion to $10 billion depending on market conditions.

The core intellectual framework is what Sacerdote calls the “S-curve” approach. Technological adoption tends to move slowly at first, then accelerates dramatically as it reaches critical mass, before eventually flattening out. The trick is identifying where an industry or company sits on that curve before Wall Street fully appreciates the magnitude of the coming growth. Sacerdote built Whale Rock around finding those inflection points.

That philosophy led Whale Rock into some of the biggest winners of the modern technology era — large early positions tied to cloud computing, digital advertising, e-commerce, semiconductors, AI infrastructure, and software platforms, often before those themes became consensus trades. Amazon became one of Whale Rock’s signature holdings after Sacerdote recognized that Amazon Web Services wasn’t a side business but the backbone of modern enterprise computing. More recently, the firm became heavily associated with the AI investment cycle through positions in Nvidia, Broadcom, and other AI infrastructure names.

The returns have been exceptional, though not without volatility. Institutional Investor reported that Whale Rock’s long-only fund gained 59.3% in 2023. The flagship hedge fund followed with a roughly 54% gain in 2024 as AI-related positions surged, propelling Sacerdote onto Institutional Investor’s annual list of the highest-earning hedge fund managers.

The Whale Rock story is not one of smooth compounding. Like many concentrated technology investors, Sacerdote endured punishing drawdowns during the 2021–2022 collapse in high-growth technology stocks as rising interest rates crushed valuations. But the firm stayed committed to its thesis on digital transformation and AI infrastructure — and when the cycle turned, it rebounded sharply. Sacerdote has argued publicly that every major technology selloff eventually gives birth to another innovation cycle, and that investors rarely capture extraordinary long-term gains without enduring painful corrections along the way.

Whale Rock also differentiates itself through research intensity. The investment team reportedly conducts thousands of meetings annually with company management teams, suppliers, customers, and industry experts to identify durable competitive advantages before they show up in earnings estimates.

In many ways, Whale Rock represents the evolution of the old Fidelity growth-investing culture into the modern AI era — deep fundamental research discipline married to a concentrated hedge fund structure focused almost entirely on technological disruption. When Sacerdote and his team build a large position, Wall Street pays attention.

The Five Stocks Whale Rock Was Buying in Q1

1. Viavi Solutions (VIAV)

Viavi Solutions is the kind of technology infrastructure company that rarely generates excitement — and quietly becomes indispensable. The company dominates niche areas of optical networking test equipment, network monitoring, and communications infrastructure diagnostics. As hyperscale data centers, AI clusters, telecom networks, and cloud infrastructure grow more complex, the need to test and validate those systems grows with them.

Whale Rock’s interest in VIAV reflects a theme running through many of its investments: own the picks-and-shovels providers enabling explosive data growth, not just the obvious consumer-facing AI names. The stock also carries characteristics sophisticated growth investors tend to appreciate — improving margins, strong free cash flow generation, and leverage to long-cycle communications spending that could accelerate as AI traffic strains global networking infrastructure.

2. Advanced Energy Industries (AEIS)

Advanced Energy Industries sits at the center of several secular growth trends Whale Rock has aggressively pursued for years. The company provides highly engineered power conversion systems used in semiconductor manufacturing, industrial applications, data centers, and precision manufacturing environments.

AI has created a surge in demand not just for semiconductors themselves but for the sophisticated manufacturing equipment required to build them. AEIS benefits from rising wafer fabrication spending, advanced packaging demand, and the power-management complexity of modern computing systems. Whale Rock’s purchase signals confidence that semiconductor capital spending remains in the early innings of a multi-year cycle driven by AI infrastructure, electrification, and sovereign semiconductor investment programs across the United States, Europe, and Asia — exactly the kind of enabling-technology bet Sacerdote has historically favored during major platform transitions.

3. MKS Instruments (MKSI)

MKS Instruments fits naturally alongside AEIS in the Whale Rock framework. MKS supplies critical process technologies, lasers, vacuum systems, photonics components, and advanced manufacturing tools tied heavily to semiconductor fabrication and industrial automation. After its acquisition of Atotech expanded its electronics and specialty manufacturing footprint, MKSI became even more deeply embedded in the advanced electronics supply chain.

The stock suffered from cyclical semiconductor weakness and inventory corrections over recent years, but Whale Rock appears to be betting the downturn created an opportunity to accumulate shares ahead of the next semiconductor upcycle. The firm has repeatedly shown willingness to buy cyclical technology infrastructure businesses when sentiment deteriorates but long-term demand drivers remain intact. AI infrastructure spending, advanced packaging growth, and high-performance computing demand all represent potential tailwinds for MKS over the next several years.

4. Klaviyo (KVYO)

Klaviyo represents a more classic Whale Rock growth investment. The company operates a marketing automation and customer data analytics platform aimed primarily at e-commerce merchants. It benefits from the continued migration of commerce to digital platforms and the growing need for businesses to personalize customer engagement using first-party data. In a world where privacy restrictions have weakened third-party advertising models, companies increasingly need their own customer intelligence infrastructure.

Whale Rock has historically excelled at identifying software businesses sitting at the intersection of data, automation, and recurring revenue growth. KVYO’s strong organic growth, high gross margins, and expanding enterprise opportunity fit naturally within Sacerdote’s S-curve investing framework. The company also carries the operating leverage growth investors love to see as software firms mature and scale.

5. JFrog (FROG)

JFrog may be the most purely “Whale Rock” stock of the group. The company provides software development and DevOps infrastructure tools that help enterprises manage, secure, and distribute software packages across increasingly complex computing environments. As software development becomes more automated and AI-assisted, the demand for secure and scalable software delivery infrastructure becomes critical. Whale Rock dramatically increased its JFrog position during the quarter, making it one of the firm’s most significant portfolio additions.

The attraction is straightforward. JFrog sits at the intersection of cloud computing, cybersecurity, AI deployment, and enterprise automation. The company has been integrating AI functionality into its platform while benefiting from growing enterprise demand for software supply chain security — precisely the kind of long-duration secular growth story Whale Rock has built its reputation identifying before the broader market fully appreciates the scale of the opportunity.