According to traders at Goldman Sachs Group, hedge funds have been selling U.S. semiconductor stocks that have experienced significant gains to lock in profits, while still maintaining their overall exposure to the artificial intelligence theme.
Goldman Sachs' prime brokerage team stated in a report to clients that over the past month, semiconductors and semiconductor equipment were the most net-sold sub-sector within the U.S. stock market.
Simultaneously, these funds increased their short positions in U.S. equity macro products, indices, and exchange-traded fund (ETF) instruments, which are typically used to hedge broader market risks. These short positions have now risen to their highest level in a decade.
The team, led by Vincent Lin, wrote: "This suggests that funds are consolidating and managing their semiconductor exposure within their overall portfolios amid substantial stock price increases in the sector, rather than signaling a paradigm shift away from the AI theme." Goldman Sachs' tracked basket of technology, media, and telecommunications AI stocks indicates that overall exposure to U.S. AI equities remains near record highs.
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