đš BIG SHIFT: HEDGE FUNDS ARE DUMPING SOFTWARE, CHASING CHIPS đ„
Something dramatic is happening in U.S. markets đ Hedge funds are running away from software stocks at a record pace. Software exposure has fallen to just 4.5% of total U.S. hedge fund positions â the lowest ever recorded. Since mid-2023, this number has crashed by 12 full percentage points. Thatâs not a rotation⊠thatâs an exit.
At the same time, money is flooding into semiconductor and chip equipment stocks đ„ Exposure there has jumped to a record 8%, up 7 points over the same period. Even more shocking, hedge funds have now bought chip stocks equal to 35% of the entire sectorâs market value as of January 2025. Meanwhile, software stocks are seeing net selling of -8%. The message is loud and clear.
Why is this happening? đ§
AI, data centers, defense tech, and energy efficiency all need chips, not just apps. Software growth is slowing, margins are under pressure, and competition is brutal. Chips, on the other hand, sit at the heart of AI, geopolitics, and industrial power. Hedge funds arenât guessing â theyâre positioning. This is a historic money shift, and if it continues, software could stay weak while semiconductors tighten their grip on the market. The smart money has already moved⊠the question is, whoâs next? đđ°