Source: Zhitong Finance
Technology stocks last week recorded their biggest net buying since December 2022. This trend was mainly driven by long positions and short buybacks.
Hedge funds continued to maintain their risk appetite for technology stocks last week, buying companies in the sector at the fastest rate in over a year. Technology stocks last week had their biggest net buying since December 2022, according to data compiled by Goldman Sachs Group's brokerage business. This trend is mainly driven by long positions and short buybacks.
According to information, the S&P 500 technology index rose 5.1% last week, ending the longest four-week downward trend since September. Although the index declined for most of April due to concerns about the Federal Reserve's high interest rate policy, hedge funds have been net buyers in the industry for the fourth week in a row.
Last week,$Alphabet-A (GOOGL.US)$Parent company Alphabet and$Microsoft (MSFT.US)$The optimistic financial report released boosted investors' confidence in the fundamentals of the industry. Among them, Alphabet assured investors of its artificial intelligence prospects, with a market capitalization exceeding $2 trillion; Microsoft showed the progress of artificial intelligence in its quarterly results, and the stock price rose accordingly.
“The long-term potential of technology is very clear and almost undisputed,” said Seema Shah, chief global strategist at Xin'an Asset Management. “However, due to high valuations, many investors were previously unwilling to invest more. The recent pullback gave valuations a slight sigh of relief and provided investors with an opportunity to touch on this strong and long-term theme.”
Goldman Sachs analyst Vincent Lin and others wrote in a report that “profit performance is superior to market sentiment,” and added, in addition$Meta Platforms (META.US)$Sales guidance fell short of expectations, and the S&P 500 index was not significantly hampered.
While almost all technology sub-sectors have capital inflows, semiconductors and semiconductor equipment companies are the main buyers. According to the data, the allocation ratio of hedge funds to this sub-sector rose from 1.1% at the beginning of the year to 4.4%, the highest level in more than five years.
Overall, hedge funds made net purchases of US stocks at the fastest rate in about five months last week, and the S&P 500 index also recorded its best performing week in 2024.
However, hedge funds have adopted different strategies for different types of stocks. For non-essential consumer goods stocks, hedge fund managers have adopted an aggressive short selling strategy, thereby offsetting new long positions. However, when it comes to essential consumer goods stocks, short selling operations dominate.