Hedge funds have been taking profits in U.S. semiconductor names after a substantial run-up in chip equities, according to analysis from Goldman Sachs. Data from the bank's prime brokerage desk indicate that, over the past month, the semiconductor and semiconductor equipment subsectors were the most heavily net-sold among U.S. industry groups.
The transactions appear to be reductions of long positions rather than the initiation of fresh short positions targeted at chipmakers. As a result of the recent activity, the semiconductor sector has shifted to a net-sold position for the year to date.
The trimming follows a dramatic advance for chip shares. Goldman's AI semiconductor basket has outperformed the S&P 500 by more than 50 percent so far this year. Meanwhile, the broader S&P 500 itself added in excess of 18 percent over the period from late March up to a recent three-day pullback.
Market moves abroad mirrored the intensity of the rally in AI-related infrastructure. South Korea's Kospi index briefly climbed above the 8,000-point mark in mid-May, extending its year-to-date gain beyond 80 percent before pulling back sharply.
Goldman's prime brokerage team framed these portfolio moves as profit management rather than a change in strategic view on artificial intelligence. Exposure to U.S. AI-related stocks tracked within the bank's technology, media, and telecommunications basket remains close to record highs, the analysis shows.
At the same time, hedge funds have boosted short positions in broad equity index instruments and exchange-traded funds, employing those shorts as hedges against wider market risks. Those broad-market short exposures are now at a decade-long peak, according to the same prime desk data.
The Goldman team also highlighted leverage dynamics. Overall gross leverage among funds has climbed to a fresh five-year high this month, while net leverage has stayed comparatively steady. That combination - higher gross leverage but stable net leverage - was described by the analysts as inconsistent with the sort of retail-driven euphoria visible in other corners of the market.
In sum, the prime brokerage data depict hedge funds booking gains in the strongest-performing chip names while sustaining sizable allocations to AI-oriented equities and increasing broad-market hedges. The pattern reflects active portfolio management in response to outsized recent moves in semiconductor and AI-related markets.