Hedge funds edged back into technology stocks last week after several weeks of aggressive selling with buying focused on large cap tech names, according to a report by Reuters citing a recent client note from the prime brokerage division at JPMorgan.
Stocks viewed as vulnerable to advances in artificial intelligence were also in favour, following sharp declines across the sector earlier this year. Technology shares have come under pressure after a prolonged rally, as investors reassess whether AI-driven growth can justify elevated valuations.
JPMorgan noted that while positioning between semiconductor and software stocks remains stretched across the US, Europe and global markets, the pace of rotation out of the sector appeared to slow or partially reverse. Software stocks, in particular, saw renewed interest after experiencing historically heavy selling in the prior week.
Separate data from Goldman Sachs showed hedge fund leverage increased in the week to 14 February and is now approaching its highest level in a year. Goldman also reported that net selling in global equities recently reached its strongest level since last April, when US President Donald Trump announced a new round of import tariffs.
By sector, financial stocks recorded the largest net sales, while energy, healthcare and consumer staples attracted the strongest net buying, according to Goldman’s prime brokerage desk.
