Hedge funds were caught off-guard by earnings from five of the “Magnificent Seven” tech giants last week, prompting significant short covering, according to a client note from the Prime Services division at Goldman Sachs.

For the first time in three weeks, Information Technology (XLK) emerged as the most net bought US sector, driven by a combination of short-covering and long buying, resulting in a buy-sell ratio of 3.4 to 1. The notional short covering was the largest in four months.

Apple, Amazon, Alphabet, Meta, and Microsoft all reported results last week, contributing to a 2.4% weekly gain in XLK and a 1.9% rise in the Nasdaq 100 (QQQ). Within the sector, Semiconductors & Semiconductor Equipment, Electronic Equipment, and IT Services were the most actively bought, while Tech Hardware and Software were the only sub-sectors to see net selling.

October has positioned Info Tech as the most notionally net bought US sector on Goldman’s Prime book, with a long-short ratio of 1.96, placing it in the 91st percentile over the past year and the 41st percentile over five years.