# Follow the Money: AI Investment Strategy

> Stephen Yiu's Blue Whale Fund shifts from software to hardware stocks amid AI boom.
- Title: Follow the Money: AI Investment Strategy · MoneyWeek
- Summary: Stephen Yiu's Blue Whale Fund shifts from software to hardware stocks amid AI boom. Stephen Yiu's Blue Whale Growth Fund pivots from software to hardware…
- Keywords: stephen yiu, blue whale growth fund, ai boom, hardware stocks, software stocks, tech investment, investment strategy, MoneyWeek
- Source: MoneyWeek — https://moneyweek.com/investments/stephen-yiu-moneyweek-talks
- Published: 2026-11-04T05:00:00+00:00
- Read time: 1 min
- Topics: stephen yiu, blue whale growth fund, ai boom, hardware stocks, software stocks, tech investment, investment strategy
## Investment Philosophy
Stephen Yiu's Blue Whale Growth Fund follows a simple strategy: invest in companies receiving spending from consumer, enterprise or government sources.

> our investment philosophy is very simple it's basically follow the money
## Current Portfolio Focus
The fund is heavily invested in tech stocks but not primarily as a tech investor focusing on companies with spending tailwinds.

> it's basically follow the money
## Historical Shift
From 2017 to 2022, consumer spending drove company growth with low interest rates, inflation and globalisation supporting robust economic conditions.

> consumer spending was a lot more robust in the 10 years up to 2022
## Software to Hardware Pivot
Yiu sold software stocks two years ago as ai threatens software companies' moats through easier rival product creation.

> ai is actually a big risk to the moats of software companies
## Hardware Investment Focus
The fund now primarily holds hardware stocks benefiting from ai-driven demand for chips and components.

> the fund is still heavily weighted towards the tech sector but its actual exposure is principally in hardware stocks
## Oil and Gas Addition
Blue Whale added an oil and gas producer anticipating sustained high oil prices from conflicts and geopolitical tensions.

> nobody should ever be interested in european defence companies before 2022
## European Defence Shift
The fund invested in a european defence firm as government spending shifted structurally with better fundamentals and returns.

> defence budgets were very much linked to european nominal gdp and european gdp has been very disappointing for many years
## Bottom-Up Approach
Blue Whale focuses on understanding a company's earning power rather than top-down geopolitical factors.

> you have to go back to the basics which is do you understand the business or the ecosystem better than the market
## Key takeaway

Stephen Yiu's Blue Whale Growth Fund pivots from software to hardware stocks as AI demand drives chip investments.