Hedge funds have lowered broad AI exposure below its benchmark weighting, a stance last seen in early 2023, as managers reassess whether infrastructure spending is generating returns quickly enough.
The current streak of portfolio de-risking is the longest unbroken one in more than 15 years. Managers question whether major AI infrastructure outlays are delivering returns fast enough, and recent results from Alphabet and Amazon have added to investor concerns.
Most hedge fund buying in U.S. equities came from investors closing short positions, even as gross leverage fell. Those purchases represented 40% of recent hedge fund sales in technology stocks.
An additional gauge of global AI stock flows shows later sales have erased hedge funds’ net buying accumulated from the beginning of 2025. The measure nets purchases against sales; it does not mean hedge funds sold every AI share they own. EconoTimes previously covered the reversal of those net purchases.
