Hedge Funds Are Loading Up on Tech Stocks—Fastest Pace in a Decade

Looks like hedge funds are making a strong statement: they’re back in love with tech.

According to Goldman Sachs, hedge funds have been buying U.S. information technology stocks at the fastest weekly pace in over ten years. Last week alone saw consistent daily buying activity, with total long purchases in dollar terms reaching the highest since November 2024. What’s particularly interesting is that this wasn’t a one-sector story—10 out of 11 S&P sectors saw net buying, but tech clearly took the lead.

Where’s the money flowing?

The buying was widespread across tech sub-sectors, but semiconductors and semiconductor equipment were the biggest winners. On the flip side, the software sector actually saw slight net selling last week—possibly some profit-taking after strong YTD gains.

There’s also been some rotation happening. While the so-called “Magnificent 7” stocks (think Apple $AAPL, Nvidia $NVDA, Microsoft $MSFT, etc.) were trimmed slightly, hedge funds increased their exposure to Chinese ADRs like Alibaba ($BABA), PDD ($PDD), Baidu ($BIDU), and JD.com ($JD). That shift, however, hasn’t paid off yet. U.S.-China tensions have pressured Chinese tech stocks, while the “Mag 7” have continued to deliver—up about 12% in Q2 so far.

Broader context: May was red hot

Zooming out, May was one of the strongest months for global equity markets in decades. The S&P 500 gained just over 6%, its best May since 1990. The Nasdaq rose nearly 9.6%, its strongest May since 1997. Hedge funds didn’t sit this out—Goldman says global hedge funds bought equities at the fastest pace since November 2024, and sentiment was bullish across all major regions, with North America and Europe seeing the largest inflows.

Interestingly, tech isn’t just a U.S. story anymore. Hedge funds ramped up their bets on European tech companies too, making last week the largest single-week net long position in tech globally in over five years. Investment interest focused on companies tied to the AI value chain: semis, hardware producers, and even electrical equipment makers.

Regional plays: Europe in the spotlight

In Europe, hedge funds were net buyers in six markets—Spain, France, Finland, Germany, Sweden, and Denmark—while trimming positions in Ireland, the Netherlands, and Switzerland. Sector-wise, non-essential consumer goods, financials, healthcare, and communications attracted attention.

While most of the buying centered on individual equities, there were also some tactical long trades in equity indices, pointing to a general risk-on mood.

My Take

This kind of aggressive positioning from hedge funds is worth watching. Tech stocks—especially those linked to AI—have continued to outperform, and hedge funds are clearly leaning into that narrative. As for Chinese ADRs, I see a lot of potential in the long run, but geopolitical risks remain a major overhang that investors can’t ignore. For hedge funds, this bet might be a contrarian play or simply a diversification move—but either way, the returns haven’t shown up yet.

Also notable: despite all the buzz about macro risks—rates, inflation, geopolitics—hedge funds are still willing to take on significant single-stock risk. That shows confidence… or at least a strong chase for returns.

#hedgefund