Hedge funds return to major technology stocks following period of heavy selling

Hedge funds increased their purchases of the largest technology stocks and companies considered vulnerable to advances in artificial intelligence last week, according to a research note from JPMorgan Chase & Co. JPM. This buying activity represents a completed and notable shift in sector-level equity positioning and occurred as hedge fund leverage rose toward its highest level in a year.

The move into these specific tech names coincided with a slowdown or partial reversal of the prior rotation between the semiconductors sector and the software sector. This shift in flows is viewed as structurally important, especially as global net sales orders reached levels not seen since US US President Donald Trump announced import tariffs last April.