Hedge Funds Increase Exposure to Semiconductor Stocks as AI Investment Momentum Builds

Global hedge funds maintained a strong appetite for technology and semiconductor companies in May, continuing a trend that has persisted throughout much of 2026 despite inflation concerns, rising energy prices, ongoing conflict in the Middle East, and questions surrounding fiscal sustainability. As global equities extended April's rally and major benchmarks, including the MSCI World Index, S&P 500, and Nasdaq Composite, closed the month near record highs, hedge funds continued to lean into growth-oriented sectors, according to Hazeltree, a leading provider of integrated treasury and liquidity management solutions for alternative asset managers.

Based on its just-published May 2026 Hazeltree Crowding Report, the firm found strong interest from hedge funds in the Magnificent Seven, with long positions in Alphabet and Apple and a decline in Meta. A movement toward shorting Amazon and Meta also took shape, with a noticeable reduction in the price of Microsoft and Apple. Tesla continued its previous month's run as the least favoured name in the group, with persistent bearish positioning, as measured by the long-to-short fund count ratio.

Semiconductor names continued to captivate hedge funds, as they provide the backbone of AI. Hazeltree tracked the PHLX Semiconductor Sector Index^TM, which includes 30 of the largest U.S.-traded semiconductor companies, and found sentiment turning slightly more bullish, as the share of constituents exhibiting net long positioning increased from 57% in April to 60% in May. Notable takeaways included:

• Texas Instruments flipped from short-biased to long-biased in May as measured by both the long-to-short fund count ratio and net long exposure.
• Crowding remains most pronounced on the long side in Nvidia, followed by Broadcom and Applied Materials.
• On the short side, ON Semiconductor remains the most crowded name, followed by Monolithic Power Systems and Microchip Technology.

The monthly report provides a look back at hedge fund long and short crowding across the Americas, EMEA, and APAC, based on Hazeltree’s analysis of anonymised data from approximately 16,000 securities on its proprietary securities‑finance platform, representing more than 600 global funds. It includes the ten most crowded regional long and short positions, broken out by large-, mid-, and small-cap categories.

Hazeltree defines the crowding score as a relative metric that normalises the number of funds in Hazeltree’s community that are long or short a given security within a predefined group (by region and market cap) relative to its peers. When a fund is long a stock, it generally means it either expects the stock's price to rise or is using longs to hedge its exposure to shorts. On the contrary, when a fund is short a stock, it generally means they either expect the stock's price to drop or are hedging their long exposure.

“Based on May global equity market activity and the activity we observed in Hazeltree’s hedge fund community, managers demonstrated more confidence that the market rally had legs despite lingering concerns about inflation, energy prices, and geopolitical tensions,” commented Tim Smith, managing director, Data Insights, Hazeltree. “We kept a close eye on semiconductor names and NXP Semiconductors' long-to-short fund count ratio nearly doubled from roughly 2:1 in April to 4:1 in May – the biggest improvement in the entire sector.”

Smith added, “We were particularly intrigued by hedge fund positioning in NXP, including long fund participation increasing approximately 17.3% month-over-month, with short fund participation declining and a rise of 10% in its stock price between April and May.”

Further Highlights at the Single-Name Level

North America: Top Movers (>10% MoM Change in Fund Counts)

Long crowding increases

• Mid Cap: Brinker International, SSR Mining, and Monday.com
• Small Cap: Dauch Corporation and Green Plains

Short crowding increases

• Large Cap: ON Semiconductor and Omnicom
• Mid Cap: Hyatt
• Small Cap: Flowers Foods and CBIZ
• Note: General Mills from the Large Cap group, Molina Healthcare and Cipher Digital from the Mid Cap group, and Ziff Davis and Canadian Solar from the Small Cap group saw a >10% month‑over‑month decrease in short fund counts.

EMEA: Top Movers (>10% MoM Change in Fund Counts)

Long crowding increases

• Small Cap: MG Critical Materials, Volex, and 4Imprint

Short crowding increases

• Large Cap: Adyen

Note: Marks & Spencer from the Mid Cap group, Redcare Pharmacy, and Gerresheimer from the Small Cap group saw a >10% month‑over‑month decrease in short fund counts.

APAC: Top Movers (>10% MoM Change in Fund Counts)

Long crowding increases

• Large Cap: Kioxia
• Mid Cap: JTEKT
• Small Cap: NTN

Note: Vault Minerals from the Mid Cap group saw a >10% month‑over‑month decrease in long fund counts.

Short crowding increases

• Large Cap: Lasertec
• Small Cap: Silex Systems, Kyoritsu, Ube, and DroneShield

Note: Horizon Robotics, from the Mid Cap group, saw a >10% month‑over‑month decrease in short fund counts.

To view the May 2026 Hazeltree Crowding Report and past reports, click here.

Methodology
The Hazeltree Crowding Report is based on anonymized and aggregated positioning data from Hazeltree’s proprietary securities‑finance platform, which reflects trading activity from its hedge fund client base of more than 600 global funds. It calculates the crowding score by sector and region (Americas, EMEA, and APAC) and analyzes both long and short crowding over the month of May 2026.