Goldman Sachs reveals which stock hedge funds are quietly selling now

TLDR

• Hedge funds are selling semiconductor stocks to book profits after a big rise, according to Goldman Sachs data.
• Goldman’s AI semiconductor basket has outperformed the S&P 500 by more than 50% this year.
• Semiconductors became the most net-selling subsector in the United States over the past month.
• Funds Aren’t Abandoning AI – Overall exposure to US AI stocks remains near record levels.
• Short positions in broad market indexes and ETFs have reached their highest levels in a decade as a way to hedge against broader risks.

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Hedge funds quietly cut their semiconductor positions after a strong rally in chip stocks, according to data from Goldman Sachs’ prime brokerage desk. These moves are framed as portfolio management, not a shift away from artificial intelligence.

Goldman Artificial intelligence for semiconductors The basket of stocks has outperformed the S&P 500 by more than 50% this year. The S&P 500 itself rose more than 18% between late March and the recent three-day decline. This type of rapid price increase tends to attract profit taking.

Over the past month, semiconductors and semiconductor equipment have become the top net-selling U.S. subsector tracked by Goldman’s head office. Funds trimmed long positions rather than adding new short bets against the sector.

The semiconductor sector has now moved into a net short position for the year so far. This is a change from earlier in the year when funds were increasing their exposure to the space.

South Korea’s Kospi, often seen as a gauge of global appetite for AI infrastructure, briefly surpassed 8,000 points for the first time in mid-May. Its year-to-date gains extended to over 80% before falling sharply.

Funds that keep AI bets intact

Despite the sell-off in chip stocks, Goldman The data shows that overall exposure to US AI stocks tracked by the Technology, Media and Telecommunications basket remains near record levels.

Vincent Lin and Goldman’s lead team told clients that the funds are “consolidating and managing their exposure to semiconductors within their overall portfolios, rather than signaling a paradigm shift away from the AI ​​theme.”

In other words, selling seems to be about reaping gains from a winning trade, not changing the view on AI as a long-term topic.

Hedging activity picks up

At the same time, funds were selling chips and were adding short positions in broad stock indexes and exchange-traded funds. These positions are now at their highest levels in a decade.

This type of hedging is typically used to reduce exposure to broader market fluctuations without selling specific stocks.

Total leverage across hedge funds rose to a new five-year high this month. However, net leverage remained relatively stable.

This setup looks different from the kind of enthusiasm we’re seeing among retail investors right now, Goldman noted. The company described it as incompatible with widespread euphoria.

The S&P 500 was trading at 7,410 points as of press time, down about 0.31% on the day.

Taken together, the data suggests that hedge funds are managing risk carefully while maintaining their core AI positions.