Hedge Funds Buying Tech Stocks at Fastest Pace in 15 Months as AI Regulatory Debate Intensifies
nashnova research
Goldman data show hedge funds were net buyers of US tech stocks on 10 of the past 11 trading days, with long-buying speed at the 97th percentile over five years — but the ink was barely dry on those positions when an AI-regulation clash landed at the worst possible moment.
How aggressively did hedge funds pile into tech?
Net buying of TMT (tech, media & telecom) stocks on 10 of 11 sessions. Two-week long-buying speed hit the 97th percentile over five years — the highest since June 2025.
Top sub-sectors: semiconductors & equipment, interactive media & services, IT services. Nearly every TMT sub-sector saw net inflows.
This means → funds were not testing the water — they flooded into tech across the board, driven almost entirely by long buying, with short-side activity unusually quiet.
Where did the money come from?
Hedge funds simultaneously dumped macro products (index + ETF positions) at the largest scale since the week of April 3 last year. Short selling outpaced long buying 3.2-to-1, more than 2 standard deviations above the one-year average.
In plain terms = the trade was extreme — buy tech with one hand, short the broad market and credit with the other. The bet is that tech outperforms everything else.
Financials bled the most: selling speed hit the fastest since mid-March, led by financial ETFs, insurance, and consumer finance. Industrials, healthcare, and staples were also net sold.
What does the leverage picture tell us?
Gross leverage fell to 206.9 % (20th percentile over one year). Net leverage rose to 50.2 % (6th percentile). The long/short ratio climbed to 1.64× (26th percentile).
This means → overall leverage is not stretched, but the directional tilt is unmistakable — longs are being added while shorts lag. The direction of the bet matters more than the size of the leverage.
Why did the AI regulation row hit at the worst time?
The trigger: Anthropic CEO Dario Amodei publicly called for slowing frontier-model development and urged government curbs on open-source competition. Trump then flatly refused to intervene. The clash sent AI-regulation uncertainty sharply higher.
Asia reacted first: AI-linked stocks fell across the board Monday — SK Hynix dropped over 6 %, SoftBank fell 11 %.
In plain terms = hedge funds had just rebuilt tech longs at the fastest pace in 15 months. Those positions had not been market-tested before a policy shock arrived — the timing could not have been worse.
What other catalysts could trigger volatility this week?
FOMC decision: markets price roughly 90 % odds of a September rate hike. Last week's above-forecast core CPI was read as a hiking signal.
$13 billion 20-year Treasury auction (Tuesday): with tech longs elevated and AI-policy fog thickening, the auction result carries outsized signaling power for rates.
The Bank of England (Thursday) and Bank of Japan (Friday) also announce rate decisions. This means → the week is packed with macro events, and whether tech longs can hold through them will be a key test of near-term market direction.
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