This $70 Billion Hedge Fund Was Early to AI’s Big Winners. What It Sees Next for the AI Trade.

Nov 12, 2025 16:09:00 -0500 by Tae Kim | #AI

Jaimin Rangwalla runs Coatue’s public stock investing business. How his firm is investing in the next wave of AI opportunities. (Courtesy Coatue)

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Innovation Investing. Hi everyone. Coatue has been one of the most successful investors in technology over the past two decades.

The firm was founded in 1999 and looks to identify important secular innovations early, alongside the most likely winners. It now manages about $70 billion in assets split roughly evenly across public and private investing strategies.

Coatue remains bullish on artificial intelligence and is finding new ways to play the trend. It recently launched the Coatue Innovation Fund, which invests in public and private companies for qualified clients. In August, the fund invested in Anthropic and SpaceX. Other top positions at the end of September included OpenAI, Microsoft , Taiwan Semiconductor Manufacturing , and Meta Platforms .

The firm has started to use AI tools internally to enhance the productivity of its investment teams. AI collects data, highlights key insights from earnings reports, and helps to identify important areas for analysts to consider. Coatue also spends $45 million a year on data science research, pulling together near real-time information from credit card and email receipt transactions, web traffic, and social media trends.

Barron’s Tech recently spoke with Jaimin Rangwalla, who is responsible for Coatue’s public stock investing business as the firm’s Chief Investment Officer of Publics. We talked about how Coatue is assessing the current AI wave and where they’re finding opportunities.

Here are edited highlights from our conversation:

Barron’s: What is Coatue’s investment philosophy?

Jaimin Rangwalla: What makes technology attractive is that it is one of the ripest areas for disruption. Technology innovation allows for the creation of new winners and losers. It creates new business models and creates new profit structures. We’re always thinking about long-term secular trends and finding the winners.

What is the firm’s thinking on how large the impact will be from the current AI cycle?

We have studied several previous technology cycles. We believe that AI is bigger as it applies to every sector out there. It applies to every geography. Thinking about market sizes—looking at it top down across global GDP and what the opportunity for productivity improvements potentially could be—led us to think there is trillions of dollars of opportunity for AI. The dollar opportunity is bigger than we’ve ever seen before across all these technology waves.

Where are we in the AI cycle?

Listening to the largest technology CEOs out there, they still cannot access enough compute, they cannot access enough power, they cannot access enough data centers, and there’s not enough labor. We’re listening to some of the large AI labs talk about how they can’t even do all the research they want to do because they don’t have GPUs.

It tells me that we’re not anywhere near a balance. It’s hard to exactly pinpoint where we are on this curve of adoption, but I think it’s still very early because we’re still not able to unlock all the things that need to be unlocked.

What’s the potential for disruption to today’s incumbents from AI native start-ups?

The beauty of the technology innovation curves is that it allows for new companies to emerge and be large—one hundred and two hundred billion-plus market cap companies. Already just in the private markets, we’re seeing OpenAI and Anthropic are north of one hundred billion each in their last round, and they’ll probably continue to progress even higher as their fundamentals continue to accelerate.

Then you think about all the companies now in what we call the application phase, which is a lot of the companies like Cursor [AI coding assistant] and others. You’re seeing tremendous revenue growth at a pace that we’ve never seen from start-ups before. There are a significant number of private companies that will be large companies in the future.

When you talk to companies and start-ups, what are the AI use cases that are ramping and where are companies finding productivity gains?

We have a large ecosystem of portfolio companies and public companies that we’re speaking to in our day-to-day research. We’re hearing all of the anecdotes, not just in the tech sector, but in the financial sector and the industrial sector of how they are using AI.

There’s the popular things that people talk about like coding and customer service. But there’s a lot of things that are also in the marketing sphere and in the customer acquisition space.

In the trucking industry, one company said that it normally takes a person thirty minutes to create a quote and that has gone down to thirty seconds with AI. Another company that I met with talked about processing mortgage applications and how the time of that has gone from tens of minutes to tens of seconds.

That’s an insane amount of productivity gains happening that maybe people don’t fully appreciate.

Can you talk about what ideas you’re most excited about over the next 12 months?

I was told not to talk specific ideas, but I can give you a little bit of color. We’re still excited about semiconductors. We’re still excited about the nuclear power ecosystem. We’re still excited about public cloud and cloud infrastructure.

But here are some areas that are different: We’re very focused on AI applications and finding companies that are benefiting—whether it’s companies that are driving better market share position, faster top line growth, or faster margin expansion using AI. It is outside of the traditional tech sectors. That’s where I’m really excited.

Any kind of subsectors that you can talk about?

I mentioned mortgages, I mentioned trucking, and I mentioned logistics. Again, nontraditional tech areas, like agriculture and even pockets of healthcare, as well. I think that you’re seeing a tremendous use of AI. Also, in the financial sector broadly, there’s a lot of interest in areas where AI is becoming much more prevalent.

So in the same way that Coatue was early to investing in energy-related plays several years ago, you are investing in nontech companies that will benefit from AI?

Yes, we’re finding interesting opportunities the same way that we found energy, power, and industrials that were related to the AI theme two and three years ago. We’re seeing interesting AI application winners in nontraditional tech sectors.

Coatue spends $45 million dollars a year for insights and data on consumer spending health. What are you seeing in the economy right now?

The consumer is pretty stable. There’s always certain pockets of the economy that’ll be weaker as we track our general consumer spend. Nothing shows that things have gone greatly negative or have gotten materially negative. It ebbs and flows within a certain range, and we’re sitting in that range. So, nothing is out of the ordinary at the moment.

Thanks for your time, Jaimin.

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Write to Tae Kim at tae.kim@barrons.com or follow him on X at @firstadopter.