Goldman Sachs: Hedge funds’ exposure to AI stocks has fallen to the lowest level this year

BlockBeats, July 17: Prime Brokerage data shows hedge funds are reducing their exposure to AI-related stocks, explaining why strong earnings and optimistic guidance failed to stop chip stocks from falling.

Citing data from Goldman’s prime brokerage business, as reported by The Wall Street Journal, hedge funds’ exposure to a basket of AI-themed stocks has fallen to its lowest level this year. The basket includes AI hardware and semiconductor stocks that had previously seen big gains, such as AMD, Micron, and Nvidia. Goldman’s data suggests the recent decline looks more like profit-taking and position reshuffling rather than a sudden deterioration in fundamentals.

This round of trimming comes after a sharp rally in chip stocks. After TSMC released strong results and ASML raised its guidance, semiconductor stocks were still sold off, with the PHLX Semiconductor Index falling more than 4% on Thursday. Goldman-linked strategy views believe some capital is considering shifting from crowded chip trades to hyperscalers that have lagged this year’s performance, such as Meta, Alphabet, and Oracle.