Key Takeaways
- • Hedge funds have moved to an underweight position on artificial intelligence equities for the first time since early 2023, according to Morgan Stanley.
- • The shift caps the longest sustained stretch of portfolio de-risking in more than 15 years, per the same Morgan Stanley analysis.
- • The reversal is attributed to falling leverage and short covering, which has driven buying in the sector.
Summary
Hedge funds have cut their exposure to the broader artificial intelligence trade to underweight for the first time since early 2023, according to Morgan Stanley. The move ends what the bank describes as the longest sustained period of portfolio de-risking in over 15 years, a reversal that marks a notable change in positioning across the sector.
According to the Morgan Stanley analysis, as reported by Seeking Alpha News Editor Max Gottlich, the shift reflects falling leverage among hedge funds alongside short covering, which has driven buying in the group. The primary source does not provide detailed figures on the magnitude of the position changes or the specific AI names involved beyond the exchange-traded funds referenced in the article, including the Global X Artificial Intelligence & Technology ETF (AIQ), which is referenced alongside other AI-focused funds such as AIEQ, BOTZ, and WTAI.
For allocators, the key implication is that positioning in AI-linked equities has moved from a net-long tilt among hedge funds to a relative underweight. Readers seeking the underlying positioning data and methodology should refer to the original Morgan Stanley research.
According to the Morgan Stanley analysis, as reported by Seeking Alpha News Editor Max Gottlich, the shift reflects falling leverage among hedge funds alongside short covering, which has driven buying in the group. The primary source does not provide detailed figures on the magnitude of the position changes or the specific AI names involved beyond the exchange-traded funds referenced in the article, including the Global X Artificial Intelligence & Technology ETF (AIQ), which is referenced alongside other AI-focused funds such as AIEQ, BOTZ, and WTAI.
For allocators, the key implication is that positioning in AI-linked equities has moved from a net-long tilt among hedge funds to a relative underweight. Readers seeking the underlying positioning data and methodology should refer to the original Morgan Stanley research.
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