The U.S. bank stated in a client note that the exposure of hedge funds to technology hardware associated with artificial intelligence would hit its peak in October since Goldman Sachs began monitoring the data in 2016.
Goldman reported in a note on Thursday, as observed by Reuters on Friday, that the buying of hedge funds in semiconductor and other chip-related stocks, which are believed to be sensitive to economic and business cycles, indicates that speculators are of the view that the markets are still on the rise and there is more to come.
Goldman stated that Hedge fund stock buying centered on long positions, which was betting the equities to increase in Asian and U.S. companies.
In a research note on Tuesday, the Chief U.S. Investment Strategist at BCA Research, Doug Peta, told the news that firms that are set to gain due to the potential AI profits or investment are performing well, and those whose AI is not connected with are languishing.
Some of the most effective S&P sub-sectors as of this year include communications services, SPLRCL, technology, SPLRCT, and utilities that are SPLRCU, which are way ahead of the S&P 500 benchmark SPX.
However, in the case of hedge funds, the passion for tech stocks has subsided, according to Goldman Sachs.
Speculators have scaled back their purchases in American power firms, which are also regarded as belonging to the industry at the back of the servers that drive artificial intelligence, along with their research and development.
It was reported that the funds also shifted off a broad agenda among the largest technology corporations, so-called Magnificent Seven. Goldman Sachs said that the move to semiconductors and associated equipment started in September.
The bank reported that the acquisition in Asia of technology firms pushed the total inflows in further emerging markets other than China, where positioning is at “fresh multi-year highs.”
