Hedge funds and asset managers are quietly rotating into semiconductors. US tech stocks were the only net-bought sector in September, with long buys outpacing shorts 2:1.
The buying was sparked by $MU earnings and $NVDA buybacks, but prime broker data shows institutional positioning still has significant room to run.
After conversations with investors this week, I'm sensing hesitation around the AI trade. Three reasons:
1. Macro mess: Iran, oil, rates
2. Midterm uncertainty
3. AI narrative shifting faster than capital can follow
But here's the setup: Q4 earnings are coming, and forward tech/semis valuations are relatively low. The question is whether we get a re-rating as earnings and guidance come in positive, despite the macro noise.
If we clear the midterm and macro hurdles cleanly, a sustained tech rally into 2027 looks increasingly likely as institutions position for the next cycle.
The buying was sparked by $MU earnings and $NVDA buybacks, but prime broker data shows institutional positioning still has significant room to run.
After conversations with investors this week, I'm sensing hesitation around the AI trade. Three reasons:
1. Macro mess: Iran, oil, rates
2. Midterm uncertainty
3. AI narrative shifting faster than capital can follow
But here's the setup: Q4 earnings are coming, and forward tech/semis valuations are relatively low. The question is whether we get a re-rating as earnings and guidance come in positive, despite the macro noise.
If we clear the midterm and macro hurdles cleanly, a sustained tech rally into 2027 looks increasingly likely as institutions position for the next cycle.