Reverse betting! The fund manager who once bottomed out Rolls-Royce is now choosing to bottom out stocks due to the sharp drop in AI

Dmitry Solomakhin, a fund manager at Fidelity International, is a model of swimming against the tide in the investment world. His unique and bold investment strategy focuses on companies facing operational or financial difficulties, and he has proven to be successful time and time again. His next bet is to invest in stocks that have been severely impacted by the rise of AI.

Data shows that over the past three months, the global contrarian value fund managed by Solomakhin, valued at $1.1 billion, has performed exceptionally well, outperforming 99% of its peers. As of the end of April, the fund's largest holding is Rolls-Royce. Solomakhin's success is closely tied to Rolls-Royce's performance.

After experiencing supply chain challenges caused by the COVID-19 pandemic, Rolls-Royce has seen a strong rebound of nearly 400% since the end of 2022 through a series of transformations and management reforms. In an interview, Solomakhin said, "I look for companies that are generally not favored by the market, dedicated to uncovering rare opportunities that the market may have misjudged."

In addition to Rolls-Royce, Solomakhin's recent investment focus has shifted to companies hit by the wave of AI emergence. For example, he invested in the U.S. chatbot service provider Concentrix, whose stock has dropped by 38% this year due to the proliferation of AI technology.

Solomakhin pointed out, "Some believe that the emergence of AI chatbots renders certain services obsolete. This is a broad statement that overlooks the complexity of specific situations. While the market may think that some services have lost value, I do not entirely agree." Furthermore, Concentrix responded to the stock price decline by stating that the market's reaction to AI's impact was excessive, with investors mistakenly attributing the negative impact of the macroeconomic environment on the company's revenue to general AI.

Of course, Solomakhin's investment portfolio also includes the UK defense company Babcock International Group, whose stock has grown by over 170% since January 2021. However, it is worth noting that not all investments can quickly yield returns. Solomakhin mentioned that Ericsson is a "value trap," with the company's stock falling by about 20% over the past decade while the benchmark index in Stockholm has grown by over 80% during the same period. Nevertheless, Solomakhin stated, "I have been losing money on Ericsson for a long time, but I still have confidence and will not give up easily."

It is reported that since joining Fidelity in 2006, Solomakhin initially served as a European equity research analyst and began managing global long-short diversified funds in 2012. He mentioned that his average holding period is three to five years, and over the past year, the investment portfolio has achieved a 19% return, consistent with the benchmark MSCI Global Index