Hedge funds continued to push further into the artificial intelligence trade during Q1 2026, boosting their net tilt to information technology stocks by 853 basis points. According to Goldman Sachs’ latest “Hedge Fund Trend Monitor” report, that’s the biggest quarterly increase to the sector ever recorded.
Funds also added to their holdings in communication services while slashing exposure to nearly every other sectors. They carry a 90th percentile tilt to the momentum factor and an all-time high of 10% weighting in semiconductors.
AI in, but software out
Notably, hedge funds have the smallest weight in software since 2019, demonstrating another widespread narrative in the markets.
Hedge funds boosted exposures to much of the AI infrastructure ecosystem in Q1, with semis the most popular expression of this trade. Ten percent of hedge funds held at least one position in the average constituent of the Goldman AI Semiconductor Basket at the beginning of Q2.
Hedge funds also bought more data center, inference and optical networking stocks during Q1.
AI leads Rising Stars list
According to Goldman, about half of this quarter’s list of the stocks with the largest increases in popularity among hedge funds are linked to AI, led by Sandisk (NASDAQ: SNDK), Lam Research Group (NASDAQ: LRCX) and Applied Materials (NASDAQ: AMAT).
On the other hand, the list of stocks with the largest decreases in the number of hedge fund owners during Q1 included Gap (NYSE: GAP), Fiserv (NASDAQ: FISV) and Eaton (NYSE: ETN). A few information technology names also landed on the list.
Here’s the list of AI stocks with the largest net movements in popularity among hedge funds during Q1.
Login required to continue reading.
Setup a free account to get access to this article (no credit card required).
View Full Article
