Goldman Sachs Prime Brokerage Predicts Continued Rally in US Software Stocks

Deep News02-26 20:10

Goldman Sachs' prime brokerage division stated in a report that despite hedge funds reaching record short-selling levels in the software and IT services sector this week, the recent rebound in stocks from this sector is expected to continue.

A short position refers to when investors anticipate that the price of an asset will decline.

According to data from London Stock Exchange Group (LSEG), the S&P 500 Software & Services Index has plummeted over 18% year-to-date, erasing more than $1.2 trillion in market value. However, components of the index rebounded this week, with the index gaining over 4%.

The core view of the Goldman Sachs report is that the recent rally in software stocks will persist, as detailed in a report sent to clients on Wednesday, the contents of which were learned by Reuters on Thursday.

On February 24th, the software and IT services industry ranked as the first and second most heavily shorted sectors on Goldman Sachs' US prime brokerage trading platform.

Short positions have risen to their highest level since Goldman Sachs began tracking the data in 2016.

Conversely, long positions, which bet on rising stock prices, remain at historically low levels.

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