According to Goldman Sachs, hedge funds’ exposure to AI-related tech hardware reached its highest level since 2016 in October, signaling that professional investors are doubling down on the next phase of the artificial intelligence boom.
📈 Key Insights:
- Hedge funds sharply increased long positions in semiconductor and chip-equipment stocks, reflecting confidence that the AI market rally still has room to run.
- The shift began in September, with strong buying concentrated in Asia and U.S. chipmakers.
- Meanwhile, funds trimmed exposure to U.S. power companies, despite their links to AI infrastructure, and reduced positions in the “Magnificent Seven” tech giants.
🧩 Market Context:
AI continues to dominate global market narratives. BCA Research noted that companies with clear AI potential are “thriving,” while others are lagging — a trend also seen in sector performance: communications, technology, and utilities have outpaced the broader S&P 500 this year.
🌏 Regional Momentum:
Goldman Sachs also observed that Asian tech stocks are driving inflows across emerging markets, excluding China, where hedge fund positioning has already reached multi-year highs.
💬 The takeaway: Hedge funds are rotating deeper into the AI value chain, betting that the next leg of growth will come from semiconductors and supporting infrastructure — not just the headline AI giants.