Finance
Hedge funds creep back into tech stocks after weeks of selling
Published by Global Banking & Finance Review®
Posted on February 24, 2026
2 min readLast updated: February 24, 2026
Quick Summary
Hedge funds resumed buying big tech and AI‑exposed stocks, with software stabilizing after steep losses, JPMorgan says. Goldman reports leverage near a one‑year high as equity flows pivot toward defensives.
Hedge Funds Edge Back Into Tech After Weeks of Heavy Selling
By Nell Mackenzie
Hedge Fund Positioning and Market Flows
LONDON, Feb 24 (Reuters) - Hedge funds last week bought the biggest tech stocks as well as those considered vulnerable to advances in artificial intelligence, said a note to clients from JPMorgan seen by Reuters on Tuesday.
Big Tech and AI-Exposed Names Bought
The world's most valuable technology stocks have suffered sharp declines this year after years of outsized gains, as investors question whether heavy spending on AI will generate sufficient returns to justify the lofty valuations.
Semiconductors vs. Software Rotation Eases
"While positioning remains very stretched between Semis and Software (globally, in the U.S., and in Europe), the rotation seemed to slow or reverse a bit," said the note to clients.
Software Rebounds After Historic Selling
Software stocks saw some buying after being sold down by historic amounts the week before, the bank said, without putting a timeframe on the comparison.
Leverage Nears One-Year High
Hedge fund leverage increased from the week ending February 14 and is nearing its highest level in a year, said a separate note from Goldman Sachs seen by Reuters on Tuesday.
Reference to April Tariffs
Global Equity Net Sales Spike
It said net sales orders in global equities had hit their highest level since U.S. President Donald Trump announced a barrage of import tariffs last April.
No sub-sector breakdown provided
Sector Flows: Financials vs. Defensives
Financial stocks were the sector with the highest net sales, while energy, health care and staples saw the greatest net buying, said Goldman Sachs. It did not break down the financial stocks into sub-categories.
(Nell Mackenzie; Editing by Dhara Ranasinghe and Kevin Liffey)
Key Takeaways
- •Hedge funds bought mega-cap tech and AI-exposed names last week, per a JPMorgan client note.
- •Rotation between semiconductors and software slowed or partially reversed; software drew bids after historic selling.
- •Hedge fund leverage rose from the week ending Feb 14, 2026 and is nearing a one-year high, according to Goldman Sachs.
- •Global equities net sales hit their highest level since April 2025, when new U.S. tariffs were announced.
- •Financials saw the heaviest net selling; energy, healthcare and staples attracted the most net buying.
Frequently Asked Questions about Hedge funds creep back into tech stocks after weeks of selling
1What is the main topic?
Hedge funds are moving back into large technology and AI‑exposed stocks after weeks of selling. JPMorgan notes a slowing rotation, while Goldman says leverage is nearing a one‑year high.
2Why are hedge funds rotating back into tech?
Managers appear to be selectively re‑risking in major tech and AI themes after steep declines, with early signs of stabilization in software and a pause in the semis‑over‑software rotation.
3Which sectors saw the most buying and selling?
Financials had the highest net selling. Net buying was strongest in energy, healthcare and consumer staples, suggesting a tilt toward defensives.
