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Hedge funds and mutual funds diverge on AI stock picks, Goldman finds
Goldman identified 12 companies bought by both fund types in the second quarter, spanning AI infrastructure and power utilities.
Hedge funds and mutual funds are taking increasingly different approaches to the artificial intelligence trade, with hedge funds keeping broader exposure to AI-linked stocks while mutual funds remain underweight the theme overall, according to analysis cited by Hedgeweek and based on a Goldman study of institutional portfolios.
The divergence is most pronounced among major technology names. Hedge funds increased holdings of Microsoft and Amazon during the quarter, while mutual funds reduced exposure to both, and hedge funds also cut positions across a range of other AI-related stocks including Alphabet, Meta Platforms, Nvidia, Broadcom, and Applied Materials.
Mutual funds, meanwhile, took a more constructive view of parts of the semiconductor and memory supply chain, with managers increasing exposure to Advanced Micro Devices, Micron Technology and Sandisk even as hedge funds reduced those positions. Hedge funds and mutual funds showed more alignment around AI infrastructure, with Goldman flagging 12 companies that were bought by both during the second quarter, including American Electric Power, NiSource, CoreWeave, Flex, Seagate Technology, and Talen Energy.
Despite that overlap, both investor groups also trimmed exposure to certain AI-linked names during the quarter, with mutual and hedge funds cutting positions in different areas. Hedgeweek said the changes underscore increasingly selective institutional positioning across the AI ecosystem, even as Goldman maintained that hedge funds still have a stronger overall relationship with the AI theme.