Traders load up on bullish bets ahead of Nvidia’s earnings
Investing.com -- Hedge funds increased their risk appetite heading into the autumn, lifting long exposure to 277 percent, the highest since May, according to Jefferies analyst Steven DeSanctis.
The analyst noted that this shift “put the Short position at -177%, also below average,” with a long-short ratio of 1.56 as investors rotated decisively into large technology and communication-services names.
Jefferies told investors in a note that the higher exposure “was expressed in Secular Growth, our Sweet 16, Tech & Comm Services,” noting that hedge funds lifted the cohort’s weight to more than 60 percent, the highest since October 2024.
Within that group, DeSanctis highlighted that “Broadcom saw a big boost along with MSFT,” with Microsoft becoming the single largest net weight at 14.9 percent.
Broadcom’s weight is said to have risen by more than 350 basis points and is now overweight by 3.7 percent.
Microsoft’s net weight increased by 2.5 percent, making it the largest overweight at 690 basis points, according to DeSanctis.
The surge in positioning reportedly helped drive the “highest-weight ever” in the firm’s Sweet 16 basket, which reached 51.4 percent of hedge fund net portfolios as of Aug. 31.
In contrast, hedge funds pulled back from several major peers. Jefferies said “AAPL moved back to net short, and remains the largest underweight at 830bps,” while Tesla was also listed among “notable short positions.” NVDA saw reduced exposure, with hedge funds cutting weight by nearly 2 percent, leaving it roughly in line with the S&P 500.
Cyclicals lost favour, as their aggregate weight fell to 44.6 percent, while industrials were the biggest underweight. Hedge funds also kept all three bond-proxy sectors net short, Jefferies stated, with staples and utilities both held at more than 2 percent short.