Goldman Sachs: Hedge Funds Lock in Profits on Soaring US Chip Stocks While Maintaining AI Exposure

On May 21, Goldman Sachs traders reported that hedge funds have been selling off soaring US semiconductor stocks to lock in profits, while still maintaining overall exposure to the artificial intelligence theme. In a report sent to clients, Goldman’s prime brokerage team noted that over the past month, semiconductors and semiconductor equipment have been the most net-sold subsectors in the US stock market. Meanwhile, these funds have increased their short positions in US macro products, indices, and exchange-traded funds (ETFs), which are typically used to hedge broader market risks. These short positions have now reached their highest level in a decade. The team led by Vincent Lin stated, 'This indicates that as stock prices in this sector have surged, funds are consolidating and managing their semiconductor exposure within their overall portfolios, rather than signaling a paradigm shift away from the AI theme.' Goldman Sachs' basket of AI stocks in technology, media, and telecommunications shows that overall exposure to US AI stocks remains close to record highs.