GOOGL Alphabet Inc

According to Goldman Sachs’ latest Hedge Fund Trend Monitor, hedge funds significantly trimmed their holdings in major U.S. Big Tech stocks during early 2025, reallocating capital toward Chinese equities.

The quarterly report, which analyzed 13-F filings from 684 hedge funds controlling $3.1 trillion in gross equity assets, reveals a clear rotation away from the so-called “Magnificent 7” tech giants, despite their continued outperformance.

“Funds cut net positions most in Microsoft (NASDAQ:MSFT),” Goldman highlighted, identifying the company as part of its “Falling Stars” category—stocks experiencing the largest drop in hedge fund ownership.

Apple (NASDAQ:AAPL) also saw declines, falling from sixth to ninth place on Goldman’s Hedge Fund VIP rankings, replaced by names including Taiwan Semiconductor (NYSE:TSM), Netflix (NASDAQ:NFLX), and Uber (NYSE:UBER).

Nonetheless, Amazon (NASDAQ:AMZN), Meta (NASDAQ:META), Microsoft, Nvidia (NASDAQ:NVDA), and Alphabet (NASDAQ:GOOGL) remain among the most widely held stocks by hedge funds.

However, the timing of these shifts proved unfavorable. “These rotations proved poorly timed as the Mag 7 has returned +12% during 2QTD while trade tensions have weighed on China ADRs,” noted Goldman strategists led by Ben Snider.

During the first quarter, hedge funds increased their exposure to Chinese ADRs, adding shares in Alibaba (NYSE:BABA), PDD Holdings (NASDAQ:PDD), Baidu (NASDAQ:BIDU), and JD.com (NASDAQ:JD) despite ongoing geopolitical uncertainties.

While the Chinese ADR basket outperformed in Q1, it has lagged behind an equal-weighted S&P 500 by five percentage points since the beginning of Q2.

Still, hedge funds delivered resilience. “Solid stock-picking has allowed U.S. equity long/short hedge funds to maintain a return of +1% YTD despite a volatile macro backdrop,” the report stated. The VIP basket of favored long positions outpaced the market with a 6% gain year-to-date.

Leverage across hedge funds remains elevated, with gross leverage reaching record highs, propelled by a surge in short selling.

As of Q2, hedge funds held $948 billion in single-stock shorts and $218 billion in ETF shorts. Short interest on the median S&P 500 stock rose to 2.3% of the float, marking the highest level since the 2021 short squeeze.

Despite market swings, hedge funds maintained their commitment to artificial intelligence plays, sustaining exposure to AI-related stocks and adding new VIP names from the semiconductor and software sectors, including Lam Research (NASDAQ:LRCX) and Micron (NASDAQ:MU).

In terms of sector allocations, hedge funds reduced their net exposure to Health Care, particularly within Biopharma, while boosting allocations to Information Technology, Consumer Discretionary, and Industrials.

Microsoft stock price
Apple stock price
Taiwan Semiconductor stock price
Netflix stock price
Uber stock price
Amazon stock price
Meta stock price
Nvidia stock price
Alphabet stock price

Alphabet (NASDAQ:GOOGL)
Gráfico Histórico do Ativo
De Mai 2025 até Jun 2025

Alphabet (NASDAQ:GOOGL)
Gráfico Histórico do Ativo
De Jun 2024 até Jun 2025