By Nell Mackenzie
LONDON, March 11 (Reuters) - Global hedge funds’ most crowded long trades in February centered on technology stocks, data from securities lending provider Hazeltree showed on Wednesday.
The S&amp;P info tech index (.SPLRCT) , which tracks some of the biggest global technology firms, has fallen around 4% so far this year. The broader S&amp;P index is down almost 1% (.SPX) .
Here are some details about hedge fund positioning in tech:
<ul>
<li>Global tech companies such as Tencent (0700.HK) , Nvidia (NVDA.OQ) and Microsoft (MSFT.O) attracted high amounts of hedge fund buying in February, said the Hazeltree report.</li>
<li>Hazeltree’s report is based on data from 600 asset managers tracking 16,000 global stocks.</li>
<li>Hedge funds have continued to buy technology stocks through the beginning of this month to March 6, separate data from a Goldman Sachs (GS.N) client note also showed.</li>
<li>U.S. tech was the most bought region in the sector, said Goldman’s note.</li>
<li>Hedge fund buying in software companies mainly comprised of short covering, when traders must exit losing bets that wagered the asset prices would fall, said Goldman.</li>
<li>Hedge funds held crowded short tech stocks in February including in payments firm, Wise (WISE.ST) , file storage company Dropbox (DBX.O) and AI scaler, Oracle (ORCL.K) , showed the Hazeltree data. The firms did not immediately respond to requests for contact.</li>
<li>Some warn that the AI boom has entered a “more dangerous phase”, marked by exponentially rising investments in physical infrastructure and growing reliance on outside capital, according to an analysis by Bridgewater Associates last month.</li>
<li>“AI investment continues to surprise to the upside,” said a JPMorgan (JPM.N) client note on March 6, seen by Reuters on Wednesday. It pointed to projections of investment growth in the sector.</li>
<li>The world’s largest tech companies are tapping debt markets, as they seek to bolster their AI infrastructure, marking a shift for Silicon Valley firms that typically relied on cash to fund their investments.</li>
</ul>

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TCEHY

Global hedge funds are heavily investing in technology stocks, despite a 4% decline in the S&P info tech index this year. Notable companies attracting hedge fund interest include Tencent, Nvidia, and Microsoft. Hedge funds have also engaged in short covering in software firms like Wise and Dropbox. Analysts express concerns about the AI sector entering a risky phase due to rising investments in infrastructure and reliance on external capital. However, projections indicate continued growth in AI investment, with major tech firms increasingly tapping debt markets for funding.

- In February, global hedge funds predominantly focused their long trades on technology stocks, despite a dip in the S&P info tech index by approximately 4% this year.  
- Major tech companies like Tencent, Nvidia, and Microsoft saw significant hedge fund investment, while short covering contributed to hedge fund activity in software firms.  
- Analysts express concerns about the current AI investment phase, noting a shift in funding strategies among major tech companies towards debt markets to support AI infrastructure.

Reuters

TENCENT

Dropbox

Tencent

NVIDIA

Tencent Holdings Limited

Microsoft

Direxion Semicon Bull 3X

YieldMax MSFT Option Income Strategy ETF

Krne Csi China Internet

Direxion Daily NVDA Bull 2X Shares

ChinaAMC Guozheng Semiconductor Chip ETF

Tianhong CSI Computer Theme ETF

Guotai CES Semiconductor Chip Industry ETF

Direxion Daily MSFT Bull 2X Shares

iShares Expanded Tech Software Sector ETF

VanEck Semiconductor ETF

Global X Cloud Computing ETF

GraniteShares 2x Long NVDA Daily ETF

Guotai CSI Semiconductor Material Equipment Theme ETF

ISHRS S&P Glb It

Invesco Semiconductors ETF

China Southern CSI Semiconductor Industry Custom ETF

iShares Semiconductor ETF

YieldMax NVDA Option Income Strategy ETF

SPDR S&P Semicon

T-Rex 2X Long Microsoft Daily Target ETF

GTJA Allianz CSI All Share Semiconductors & Semiconductor Equipment ETF

Invesco S&P 500 Equal Weight Tech ETF

Spdr Select Tech

GraniteShares 2x Long MSFT Daily ETF

T-Rex 2X Long NVIDIA Daily Target ETF

Global X Nasdaq 100 Covered Call ETF

SPDR S&P Software

Guotai CSI Computer Theme ETF

Hedge funds pour hopes into tech even as AI jitters rattle, says Hazeltree