Catenaa, Monday, February 24, 2025– Hedge funds have exited US tech and media stocks during the two weeks ending on February 21 at the fastest pace in six months, according to Goldman Sachs.
A note sent to Goldman Sachs clients on Friday said speculators “aggressively” dumped both long and short positions in AI-related equipment, media, and communications equipment companies.
A short position expects an asset price to fall while a long, or bullish, position expects it to rise.
The note by Goldman Sachs comes as Nvidia, one of the biggest tech firms by market capitalisation, readies to report earnings.
Nvidia’s profit report this week is seen as a bellwether of the burgeoning artificial intelligence (AI) industry and according to LSEG the AI and graphics chipmaker is the world’s second most valuable company, with a 6.3% weight on the S&P 500, with its shares skyrocketing over 550% over the last two years.
The note by Goldman Sachs said stock hedge funds, which usually mix long and short bets in their trading strategies, last week lost money on their short wagers but made money on the parts of their portfolios holding long bets.
While stock pickers finished the week flat, systematic traders returned 0.36% between February 14-20.
Goldman Sachs said Hedge funds also bought developed and emerging market Asia stocks at the quickest pace in five months, with Asia now the only region globally where the balance of hedge fund trades is long rather than short.
“China, Taiwan, and Hong Kong are by far the most net bought markets on our Prime book [year to date],” said the note.
The note also said about 8% of hedge fund portfolio positions hold the stock of companies in Asian developed markets, while net allocation to Asia’s emerging markets stands at 13.3%, among the highest levels for both in the past year.
