Hedge funds have been reducing exposure to U.S. semiconductor shares after the sector’s strong rally, taking profits while continuing to maintain significant positions tied to the artificial intelligence theme, according to analysis from Goldman Sachs cited by Bloomberg on Thursday.
Figures from Goldman Sachs’ prime brokerage division reportedly showed that semiconductor and semiconductor equipment companies represented the most heavily net-sold U.S. subsector over the past month. The selling activity mainly reflected investors scaling back bullish positions rather than aggressively increasing bearish bets against the industry.
As a result, the sector has shifted into net-selling territory for the year so far.
The move comes after a dramatic surge in chip-related stocks. Goldman’s basket tracking AI semiconductor companies has outperformed the S&P 500 by more than 50% this year, while the broader benchmark itself had risen more than 18% between late March and a recent three-session decline.
South Korea’s Kospi index, often viewed as an indicator of global demand for AI infrastructure, briefly climbed above the 8,000-point level for the first time in mid-May. The index had advanced more than 80% year-to-date before retreating sharply.
Goldman’s prime brokerage desk reportedly described the recent positioning changes as portfolio rebalancing rather than a sign of weakening confidence in artificial intelligence investments. The bank noted that overall exposure to U.S. AI-related stocks within its technology, media and telecommunications basket remains close to record highs.
At the same time, hedge funds have increased short positions in broader stock index and exchange-traded fund products as protection against wider market risks. According to the report, these hedging positions are now at their highest level in roughly a decade.
Goldman analysts also noted that gross leverage across hedge fund portfolios climbed to a fresh five-year high this month, while net leverage remained comparatively stable — a pattern the bank said differs from the type of speculative exuberance currently being seen among retail investors.
Leave a Reply