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Hedge funds increased short bets on AI and chip names in July
Short positions rose for Super Micro Computer, Coreweave, and Nebius Group, while top chip and AI exposure firms saw more mixed positioning as AI infrastructure names and Nvidia faced shifting hedge fund trades.
Hedge funds increased short positions on several AI- and chip-related stocks in July, according to a Hazeltree report shared by Yahoo Finance. The report said short bets rose in Super Micro Computer, Coreweave, and Nebius Group, each landing among the top 10 most shorted stocks across Hazeltree's hedge fund client base.
Hazeltree found the stocks were also in the top 10 most shorted in June, but each saw short positioning grow further in July. The report linked the shift to investor concerns about chip valuations and whether their strong revenue growth is sustainable, and it pointed to broad weakness in U.S. chip stocks during the month.
The July picture included additional changes in related trades, with hedge funds reducing long positions and raising short positioning in Nvidia, though investors remained net long in aggregate, Hazeltree said. The report also highlighted that Coreweave shares jumped in extended trading after it beat second quarter estimates.
Hazeltree warned that elevated short interest can amplify price swings, including through a short squeeze when a rally forces shorts to buy back shares. It added that Wall Street appeared to take profits in some large AI infrastructure winners while redeploying capital into companies showing signs of monetization, and that a similar unwind occurred in leveraged semiconductor bets as investors trimmed borrowed risk rather than stepping away from AI exposure entirely.