Hedge funds raise tech, chip exposure in May, Hazeltree

Hazeltree’s monthly Crowding Report found hedge funds raised exposure to technology and semiconductor stocks in May, based on anonymised positioning data from more than 600 funds using its securities finance platform. The firm analysed positions across roughly 16,000 securities in the Americas, EMEA and Asia-Pacific as major indices, including the MSCI World, S&P 500 and Nasdaq Composite, extended a rally that began in April and finished May near record levels.

Within large-cap technology names, funds held net long positions in Alphabet and Apple while bullish participation fell for Microsoft and Apple compared with April. Short interest increased in Amazon and Meta Platforms. Tesla drew the strongest bearish positioning among that group when measured by Hazeltree’s long-to-short fund ratio.

Semiconductor stocks saw higher long exposure as managers positioned for demand tied to artificial intelligence. Sixty percent of firms in the PHLX Semiconductor Sector Index were net long in May, up from 57% in April. Nvidia was the most crowded long in the sector, followed by Broadcom and Applied Materials. ON Semiconductor remained the most crowded short, ahead of Monolithic Power Systems and Microchip Technology. Texas Instruments moved from net short to net long during the month.

NXP Semiconductors recorded one of the largest shifts in sentiment. Its long-to-short fund ratio rose from about 2:1 in April to roughly 4:1 in May. Long fund participation increased by more than 17% month on month while short interest fell; NXP shares rose about 10% over the same period.

Regional position changes were also noted. In North America, managers increased long stakes in Brinker International, SSR Mining and Monday.com and boosted shorts in ON Semiconductor, Omnicom Group and Hyatt Hotels. In Europe, long positions grew in MG Critical Materials, Volex and 4imprint while short interest rose in Adyen. In Asia-Pacific, Kioxia, JTEKT and NTN saw higher long participation, and Lasertec, Silex Systems, Kyoritsu, Ube and DroneShield experienced increased shorting.

Tim Smith, managing director of Data Insights at Hazeltree, commented that hedge funds appeared increasingly confident the equity rally could continue despite ongoing macroeconomic uncertainty.

Hazeltree’s Crowding Report aggregates anonymised securities finance activity from its hedge fund clients each month to identify where managers are concentrated on the long and short sides across global markets.