Hedge Funds Push Semiconductor Weight To A Record High, As 85% Of Large Cap Value Mutual Funds Lag: Goldman

(MENAFN- ValueWalk) Hedge funds have lifted Semiconductor exposure in their long portfolios to a record high while cutting Software to its smallest weight since 2019, according to Goldman Sachs' US Weekly Kickstart report dated May 22, 2026. The reading covers 1,059 hedge funds with $4.6 trillion in gross equity positions and 509 large-cap active mutual funds with $3.9 trillion in equity assets, drawn from the latest Hedge Fund Trend Monitor and Mutual Fundamentals filings at the start of Q2 2026.

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The Software-to-Semis rotation What specific managers did in Q1 Hedge funds are running close to maximum exposure Where the funds disagree The shared favorites Mutual funds are not keeping up What this means

The Software-to-Semis rotation is the headline of Goldman's quarterly positioning review, but there is another story: hedge fund long picks are outpacing the broad market while the average active manager is not.

The Software-to-Semis rotation

Both fund types are moving in the same direction. Mutual funds entered Q2 with their lowest Software exposure since at least 2012, and excluding the mega-caps, the mutual fund tilt in Semis versus Software is the widest in 14 years. Hedge funds carry their lowest Software weight in long portfolios since 2019, alongside a record-high Semis weight.

At the stock level, MSFT was one of the largest net-share reduction in both hedge fund and mutual fund portfolios last quarter. Hedge funds trimmed most of the rest of the Magnificent 7, with two exceptions: META and AAPL, where they added on net. Mutual funds reduced each Mag7 stock. Hedge funds added to semiconductor capital equipment names LRCX, AMAT, and ASML on net, while mutual funds added to INTC and SITM.

Hedge funds favor the picks and shovels of the AI capacity buildout. Mutual funds are taking the Intel turnaround bet and a small-cap timing chip name; institutional long/short managers are chasing the AI capex cycle through equipment makers, while mutual funds place more name-by-name bets.

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