Hedge funds are turning to technology stocks.

Investing.com – Hedge funds have increased their risk appetite as they enter autumn, raising their long positions by 277%. According to Jefferies analyst Steven DeSanctis, this is the highest level since May.

The analyst noted that this shift has left “short positions at -177%, below the average” and expressed that investors have made a noticeable shift towards large technology and communication services companies. The long-short ratio has reached 1.56.

In a note to its clients, Jefferies emphasized that the increase in positions has occurred in areas such as “Sustained Growth, Interesting 16, Technology & Communication Services,” with hedge funds raising their weighting in this group above 60%. This is the highest level since October 2024.

Within this group, Broadcom and Microsoft stood out. Microsoft has become the largest net weighting with a total of 14.9%. Meanwhile, Broadcom’s weighting is heavily loaded at 3.7%, showing an increase of 350 basis points.

Microsoft's net weighting has increased by 2.5%, becoming the largest overweight position at 690 basis points. Analyst DeSanctis stated that this positioning has been recorded as the “highest weighting” and accounted for 51.4% of hedge fund net portfolios as of August 31.

In contrast, hedge funds have reduced their positions in several major companies. Jefferies reported that Apple has entered a net short position and is in the largest underweight situation at 830 basis points. Tesla also featured among the “significant short positions.” NVIDIA, meanwhile, decreased its position by nearly 2%, aligning with the level of the S&P 500.

Cyclical stocks have lost interest, with their total weight dropping to 44.6%. Additionally, the industrial sectors are in the largest underweight situation. Jefferies noted that hedge funds maintain a net short position in all three bond substitute sectors, with food and energy sectors holding short positions of more than 2%.