Fluctuations in US hedge fund portfolios tell a fascinating story about a paradigm shift in the technology sector.
Hedge funds, which are professional investment bodies managing significant capital, are currently making a massive exit from software stocks and shifting their weight to chip stocks at an unprecedented pace.
What is actually happening in the market?
On the one hand - historic low in software: Net exposure to software stocks (the actual invested amount minus bets against the trend) fell to just 4.5%.
This is the lowest figure ever recorded for this sector.
This represents a 12 percentage point drop since the peak exposure recorded in mid-2023.
Cumulative sales of software stocks by the funds reached a level of -8%.
On the other hand - new peak in chips:
Alongside the exit from software, big money is flowing into semiconductor stocks (chips) and related manufacturing equipment:
The funds' exposure to chip stocks jumped by 7 percentage points, reaching a peak of 8% of the total portfolio.
These are purchases of an unprecedented scale: Since January 2025, cumulative purchases of chip stocks by hedge funds have been so significant that they are equivalent to 35% of the entire industry's total market cap.
These figures indicate a clear trend of 'changing hands', hedge funds are abandoning software companies in favor of chip manufacturers at a record pace, which points to a deep shift in the priorities of the world's largest institutional investors.