Hedge funds pile into tech and semiconductors as S&P 500 surges
While the benchmark index rose more than 10%, institutional capital concentrated on semiconductor leaders, with Nvidia remaining a key holding despite a slight dip in fund participation.
Hedge funds maintained a strong bias toward technology and semiconductor equities in April, according to a report released on Wednesday by data platform Hazeltree. This positioning occurred against a backdrop of significant broader market gains, with the S&P 500 index rising by more than 10% during the same period. The data suggests that institutional investors continued to favour companies with robust fundamentals, particularly within the high-growth tech sector.
Among mega-cap technology firms, Meta and Amazon.com saw notable increases in institutional interest. Hazeltree reported that the number of hedge funds holding long positions in both companies rose by more than 5% on a month-on-month basis. This influx of capital highlights a sustained confidence in the earnings power and market position of these two tech giants.
In the semiconductor space, the proportion of companies in the Philadelphia Semiconductor Index with net long hedge fund positions increased to 57% in April, up from 53% in March. This shift indicates a growing concentration of institutional capital in the chip sector, even as broader market volatility persists.
Nvidia remained a favourite long holding for hedge funds, despite a slight contraction in its popularity among fund managers. The share of funds holding long positions in the chipmaker declined by 4.5%, yet it retained its status as a core portfolio component for many institutional investors.
Crowding on the long side of the US semiconductor sector was most pronounced in Nvidia, followed by Broadcom and Lam Research. On the short side, ON Semiconductor was the most crowded name, trailed by Microchip Technology and Monolithic Power Systems, reflecting divergent views on the outlook for specific chip manufacturers.
