(Bloomberg) — Sydney-based hedge fund GCQ Funds Management said the bottom is in for the software selloff, snapping up about A$200 million ($143 million) worth of tech stocks caught in the downdraft.
The fund sold some of its top-performing stocks, including European luxury goods companies, to invest in beaten-down software stocks. In recent weeks, it has targeted Microsoft Corp, accounting software firm Intuit Inc and tech giant SAP SE, according to Chief Investment Officer Doug Tynan.
Technology firms have been swept up by the so-called “AI scare trade,” after a string of updates from startups including Anthropic PBC revived doubts about the sector’s near-term prospects. The slump deepened earlier this week after a blog post from little-known Citrini Research sketched a stark disruption scenario, stoking fresh worries about the sector’s vulnerability to rapid advancements in AI.
“One of the strangest days in markets I’ve ever seen was Monday this week when a hypothetical science fiction scenario from someone I’ve never heard of not only dropped the market, it caused the White House to comment,” Tynan said in an interview, referring to Citrini’s post. “That was the bottom — that’s my call.”
US software stocks have since rebounded from Monday’s slump, rising for a third session through Thursday as investors renewed bets on companies making strident moves to embrace the emerging technology. Shares in Block Inc. soared 25% in after-market trading after the company said it would cut almost half its workforce — around 4,000 people — as part of a pivot toward AI.
The A$2 billion GCQ fund has also faced its own challenges with underperformance among its largest holdings weighing on performance. Swedish property portal Hemnet Group AB, for example, is more than 70% below its 2025 high.
Even so, the firm is on pace for record monthly net inflows in February after attracting A$50 million last month, as its distribution team and Tynan himself urged clients to take advantage of cheap software stocks.
“The point of maximum disruption was last week,” Tynan said, adding the software selloff has been “one of the most illogical market selloffs I’ve ever seen.”
GCQ has also doubled down on property portals, buying the UK’s Rightmove PLC and SMG Swiss Marketplace Group AG, and added to its position in Hemnet after earlier trimming its holding as the stock declined.
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