Hedge Funds Increase U.S. Tech Stock Purchases

By Carolina Mandl

NEW YORK (Reuters) – Global hedge funds bought U.S. information technology stocks, including semiconductors and hardware, at the fastest rate in five months this week, coinciding with the start of the third-quarter earnings season, as reported by Goldman Sachs on Friday.

Outside the U.S., contrasting reports from chipmaker Taiwan Semiconductor Manufacturing and chipmaking equipment supplier ASML Holding led to opposing movements in their stock prices, while investors await earnings from companies like Advanced Micro Devices (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) to identify trends.

Goldman Sachs’ prime brokerage division, which serves hedge funds and monitors their positions, noted that portfolio managers have net bought U.S. information technology stocks for the third consecutive week. Hedge funds both covered short positions—bets that stocks would decline—and took on new long positions.

According to the bank, the only information technology subsector sold by hedge funds was software.

Overall, information technology represents 16.1% of hedge funds’ U.S. exposure, down from approximately 22% earlier this year.

Conversely, hedge funds sold stocks in U.S. consumer sectors, including food products, beverages, and restaurants, for the fifth consecutive week.