Situational Awareness Lost 67%. CoreWeave (CRWV) and Sandisk (SNDK) Show How Leverage Turned an AI Bet Into a Fire Sale

The latest completed 13F 4th shows the scale, but not the fund's nonstop July exposure. At the extremity of Q1 2026, Situational Awareness reported 7.18 cardinal CoreWeave shares worthy $556.1 cardinal and 1.14 cardinal Sandisk shares worthy $724.4 million, positive telephone positions successful both. Sandisk past fell 54% successful July. As losses reduced the fund's equity cushion, borrowed vulnerability made selling compulsory. The money removed leverage aft informing that it had travel adjacent to imperishable superior impairment.

The operating thesis was not frivolous. Sandisk's fiscal Q3 gross reached $5.95 billion, up 97% sequentially, arsenic data-center gross climbed 233%. It guided fiscal Q4 gross to $7.75 cardinal to $8.25 billion. CoreWeave's Q1 gross roseate 112% to $2.08 billion, and backlog reached $99.4 billion. Only 36% of its $98.8 cardinal successful remaining show obligations was expected to beryllium recognized by March 31, 2028. Those figures amusement the operating grounds down the fund's bullish thesis connected some names.

They besides conceal antithetic risks. CoreWeave reported a $740 cardinal nett loss, $536 cardinal of quarterly involvement expense, and planned $31 cardinal to $35 cardinal of 2026 superior spending. Long-term representation agreements tin permission it paying above-market prices if proviso loosens. Sandisk benefits from those terms floors, but its shares were inactive up much than 2,400% implicit 12 months adjacent aft July's collapse. Even beardown net could not forestall a crisp reversal aft that bonzer run.

That asymmetry is precise important not to place for the stocks. Sandisk has affirmative net leverage but cyclical aggregate risk; CoreWeave has contracted demand, but financing costs tin sorb overmuch of its growth.

Insider Monkey tracked 114 hedge funds holding Sandisk Corporation (NASDAQ) astatine the extremity of Q1 2026, up from 75 successful Q4 2025. CoreWeave's July 15 abbreviated involvement was 64.36 cardinal shares, 18.97% of float, with astir 2.2 days to screen connected Finviz's existent measurement calculation. That fig signals existent skepticism, though immoderate positions whitethorn hedge CoreWeave's $3.5 cardinal April convertible-note offering alternatively than explicit a axenic bearish view.

The illness is not a merchantability awesome by itself, however. It proves that a long-duration thesis cannot rescue a leveraged portfolio from a short-duration borderline call. Sandisk deserves a hold until its August 5 results reset net expectations. CoreWeave, Inc. (NASDAQ) remains the riskier banal and warrants caution until gross maturation produces durable operating nett aft financing costs.