① Hedge funds known as “smart money” increased their positions in US technology stocks at the fastest rate in over a year last week, and in particular accelerated their influx into the semiconductor industry; ② Goldman Sachs data shows that the allocation ratio of hedge funds to the semiconductor industry's US stock portfolio has increased from 1.1% at the beginning of the year to 4.4%, to the highest level in more than five years.
Financial Services Association, April 30 (Editor Liu Rui) Although last week's Meta earnings report and conference call once made the market doubt the prospects for investing in artificial intelligence,$Alphabet-C (GOOG.US)$und$Microsoft (MSFT.US)$The strong earnings report still gave Wall Street confidence back.
According to the data, hedge funds known as “smart money” increased their positions in US technology stocks at the fastest rate in over a year last week, and in particular accelerated their influx into the semiconductor industry.
Hedge funds rapidly poured into tech stocks last week
According to data compiled by Goldman Sachs Group's major brokerage firms, US technology stocks saw their biggest net purchase since December 2022 last week, driven by an increase in long positions and short compensation.
Despite the potential threat of the Federal Reserve delaying interest rate cuts,$S&P 500 Index (.SPX.US)$There was a correction for most of April, but hedge funds have been net buyers of US technology stocks for the fourth week in a row. Investors' optimism about the fundamentals of the tech industry has further increased, especially after Google's parent company Alphabet Inc. and Microsoft announced strong earnings reports last Thursday.
Seema Shah, chief global strategist at Xin'an Asset Management, said, “The long-term potential of technology stocks is very clear and almost undisputed. However, since the valuation of technology stocks is already quite high, many investors have been unwilling to increase their exposure recently, and the recent pullback just cooled down the valuations of technology stocks slightly, thus creating an opportunity for investors to increase their positions.”
The S&P 500 information technology index has been falling continuously for four weeks before, setting the longest record of decline since September last year. The index rose 5.1% last week, finally announcing the temporary end of this downward trend. Meanwhile, after Alphabet and Microsoft announced strong financial reports and showed their prospects in the field of artificial intelligence, both companies' stock prices rose. In particular, Alphabet's market capitalization has soared to more than $2 trillion.
Purchases are focused on the semiconductor industry
Goldman Sachs analyst Vincent Lin and others wrote in the report that superior performance dissipated people's concerns. He added that apart from the sales guidance issued by the Meta platform company that fell short of expectations, the S&P 500 index was not greatly dragged down by other giants.
Although almost all technology sectors saw capital inflows, purchases were mainly directed towards semiconductors and semiconductor equipment companies.
According to Goldman Sachs data, hedge funds account for the average share of their US stock portfolio from 1.1% at the beginning of the year to 4.4%, jumping to the highest level in more than five years.
Overall, the net purchase rate of US stocks by hedge funds last week reached the highest level in about 5 months. This also drove the S&P 500 index to its best weekly performance since 2024, closing at around 5,100 points.
However, hedge funds experienced more net sell-offs in non-essential consumer goods stocks, while short sales of essential commodities were the main ones.
Editor/Somer