LONDON, Jan 14 (Reuters) – Hedge funds held on to heavily crowded long bets in large-cap tech stocks last year such as Google-parent Alphabet, Microsoft, and Meta, while short-bets persisted in the likes of IBM and Strategy, a report by data and tech firm Hazeltree showed on Wednesday.
A long position is essentially a bet that an asset will rise in value, while a short position anticipates a price fall.
Hazeltree, which analysed data from over 600 asset management firms covering 16,000 stocks globally, noted that the crowdedness of hedge fund positions last year varied sharply across regions.
It noted that long bets in Alphabet, Microsoft and Meta — among the so-called “Magnificent Seven” U.S. tech stocks — reflecting conviction in software and services companies able to benefit from artificial intelligence.
“On the short side, crowding persisted in names including IBM and Strategy, while Synopsys emerged as an increasingly crowded short as concerns grew around execution risk tied to its pending Ansys acquisition,” the Hazeltree report said.
Synopsys, a chip design software provider, completed a $35 billion cash-and-stock acquisition of engineering design firm Ansys last year and missed analysts’ estimates for third-quarter revenue in September.
Wells Fargo, JPMorgan Chase, and KeyCorp showed the most crowded short positions within the financial sector, Hazeltree said.
In Europe, industrial stocks dominated crowded both long and short positions last year, reflecting exposure to increased spending in areas such as defense and energy, the report added.
It added that in Asia, crowded positions centred on industrials and tech hardware stocks – reflecting the region’s role as the manufacturing and “supply-chain backbone” of global AI growth.
(Reporting by Dhara Ranasinghe; Editing by Amanda Cooper)
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