Goldman Sachs Prime Brokerage data show hedge funds bought US technology, media and telecommunications stocks in 10 of the past 11 sessions, with the two week pace of long buying reaching its strongest since June 2025. The problem is that these positions were rebuilt just as the political and policy risk surrounding AI moved back into the foreground.👇
Takeaways by Dark Side of the Boom™
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Technology longs have been rebuilt quickly. Hedge funds bought US TMT stocks in 10 of the past 11 sessions, with the two week pace of long buying reaching the 97th percentile of the past five years.
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The broader book remains cautious. Gross leverage declined while macro products were heavily shorted, showing that managers want selected technology exposure without owning the entire market backdrop.
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The protection may not match the risk. Broad ETF and index shorts can hedge an economic shock, but they offer less protection if regulation, competition or safety concerns hit crowded AI holdings directly.
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China shows the same pattern. Broad China ETFs continue to lose capital while demand remains concentrated in semiconductors, memory and the AI supply chain.
Goldman Sachs Prime Brokerage data show hedge funds bought US technology, media and telecommunications stocks in 10 of the past 11 sessions, with the two-week pace of long buying reaching its strongest since June 2025. The problem is that these positions were rebuilt just as the political and policy risk surrounding AI moved back into the foreground.
The AI trade entered the new week carrying more weight and considerably less room for error.