Global hedge funds continued to increase exposure to technology and semiconductor stocks in May, maintaining their preference for growth-oriented sectors despite persistent concerns over inflation, geopolitical tensions and fiscal sustainability, according to Hazeltree’s latest Crowding Report.
The report, which analyses anonymised positioning data from more than 600 hedge funds using Hazeltree’s securities finance platform, found managers remained constructive on equities as major global indices, including the MSCI World Index, S&P 500 and Nasdaq Composite, extended April’s rally and finished May close to record highs.
Within the so-called “Magnificent Seven” technology stocks, hedge funds remained net long Alphabet and Apple, while sentiment towards Meta Platforms weakened. The data also showed an increase in short positioning in both Amazon and Meta, alongside reduced bullish positioning in Microsoft and Apple. Tesla remained the least favoured of the group, continuing to attract the strongest bearish positioning based on Hazeltree’s long-to-short fund ratio.
Semiconductor stocks also remained a key area of focus as investors continued to position for long-term demand driven by artificial intelligence. Hazeltree found that 60% of companies in the PHLX Semiconductor Sector Index carried net long positioning in May, up from 57% in April.
Among individual names, Texas Instruments shifted from net short to net long positioning during the month, while Nvidia remained the most crowded long position in the sector, followed by Broadcom and Applied Materials. ON Semiconductor continued to rank as the most crowded short position, ahead of Monolithic Power Systems and Microchip Technology.
Tim Smith, managing director of Data Insights at Hazeltree, said hedge funds appeared increasingly confident that the equity rally could continue despite ongoing macroeconomic uncertainty.
He highlighted NXP Semiconductors as one of the strongest improvements in investor sentiment during the month, with its long-to-short fund ratio almost doubling from approximately 2:1 in April to 4:1 in May. Long fund participation in the stock increased by more than 17% month-on-month, while short interest declined as the shares gained around 10% over the same period.
The report also identified notable shifts in regional positioning.
In North America, long interest increased in companies including Brinker International, SSR Mining and Monday.com, while short positioning strengthened in ON Semiconductor, Omnicom and Hyatt Hotels. In Europe, hedge funds added to long positions in MG Critical Materials, Volex and 4imprint, while Adyen saw a notable rise in short interest.
Across Asia-Pacific, Kioxia, JTEKT and NTN recorded increases in long positioning, while Lasertec, Silex Systems, Kyoritsu, Ube and DroneShield experienced higher levels of short interest.
Hazeltree’s monthly Crowding Report tracks long and short positioning across approximately 16,000 securities in the Americas, EMEA and Asia-Pacific regions, using aggregated and anonymised data from its hedge fund client base to identify the most crowded investment themes.
