Hedge Funds Increase Semiconductor Exposure as AI Investment Momentum Drives Market Positioning, Says Hazeltree

The first half of 2026 was defined by a tale of two stories. An AI-infrastructure investment cycle kept broadening and intensifying as positioning in AI-linked technology and hardware names grew steadily more crowded and consensus-driven from January through June, while markets had to absorb a serious geopolitical shock with an escalating Middle East conflict disrupting the transit of oil and pushing headline inflation meaningfully higher through the spring. Equity markets could not be deterred despite war-driven volatility and inflationary pressures, reaching all-time highs and recovering within weeks, suggesting a powerful underlying growth theme, according to Hazeltree, a leading provider of integrated treasury and liquidity management solutions for alternative asset managers.

The Hazeltree Crowding Report - H1 Review 2026 found hedge funds maintained strong positioning in the Magnificent Seven, particularly long interest in Alphabet, Apple and Meta, with a decline in Amazon. At the same time, short positioning increased in Amazon, Microsoft and Nvidia, while Meta and Apple experienced reductions. This underscores a more differentiated approach to individual companies rather than broad-based enthusiasm for the group.

In recent months, semiconductors have continued their run of attracting significant interest from hedge funds unabated. Hazeltree continued to track this activity through the PHLX Semiconductor Sector Index™, which includes 30 of the largest U.S.-traded semiconductor companies. Since February, overall sentiment has gradually become more bullish, with the share of constituents exhibiting net long positioning increasing from 53% in February to 70% in June. Notable sentiment shifts also emerged in Texas Instruments and NXP Semiconductors, which flipped from short-biased to long-biased in May as measured by net long exposure.

The H1 Review 2026 report provides a look back at hedge fund long and short crowding across the Americas, EMEA, and APAC from January through June of 2026, based on Hazeltree’s analysis of anonymised data from approximately 16,000 securities on its proprietary securities-finance platform, representing more than 600 global funds. It includes the ten most crowded regional long and short positions, broken out by large-, mid-, and small-cap categories.

Hazeltree defines the crowding score as a relative metric that normalises the number of funds in Hazeltree’s community that are long or short a given security within a predefined group (by region and market cap) relative to its peers. When a fund longs a stock, it generally means it either expects the stock's price to rise or is using longs to hedge its exposure to shorts. On the contrary, when a fund shorts a stock, it generally means they either expect the stock's price to drop or are hedging their long exposure.

“Reflecting on what is generally held to be an extraordinary first half of 2026, hedge fund activity demonstrated remarkable resilience, continuing to favor investment in equities despite a challenging macro uncertainty,” commented Tim Smith, Managing Director, Data Insights, Hazeltree. "Although hedge funds broadly increased long exposure across semiconductor companies during the first half, short interest also rose in Nvidia, underscoring a more selective approach to AI-related securities."

He added, “Drilling down further on semiconductors, we noted Texas Instruments' striking rise, with its long-to-short fund count ratio increasing from 0.6 on January 1 to 2.2 on June 1 – revealing the biggest movement in the entire sector - along with a climbing stock price of 68% from Jan. 2 to June 30.”

Further Highlights at the Single-Name Level

North America: Top Movers (>10% Month-on-Month Change in Fund Counts)

Long crowding increases

• Large Cap: Applied Materials, Lam Research, Mastercard and Alphabet
• Mid Cap: Axis Capital, Paylocity, Chemed and Armstrong World Industries
• Small Cap: BellRing Brands and Kemper

Note: Amazon from the Large Cap group and Inspire Medical Systems from the Small Cap group saw a greater than 10% month-on-month decrease in long fund counts.

Short crowding increases

• Large Cap: Oracle and Nebius Group
• Mid Cap: The Campbell's Company, Dropbox and Conagra Brands
• Small Cap: Sable Offshore, Canadian Solar and Neogen

Note: Palo Alto Networks from the Large Cap group, Hims & Hers from the Mid Cap group, Flowers Foods and BlackLine from the Small Cap group saw a greater than 10% month-on-month decrease in short fund counts.

EMEA: Top Movers (>10% Month-on-Month Change in Fund Counts)

Long crowding increases

• Large Cap: NatWest, AIB Group, ABB, Centrica and AXA
• Mid Cap: Drax Group, IMI and Games Workshop
• Small Cap: Atalaya Mining Copper and AMG Critical Materials

Note: IG Group, Bellway from the Mid Cap group and Gamma Communications from the Small Cap group saw a greater than 10% month-on-month decrease in long fund counts.

Short crowding increases

• Large Cap: CVC Capital Partners and Elia Group
• Mid Cap: AUTO1 Group and Sodexo
• Small Cap: Vistry Group

Note: Hensoldt from the Mid Cap group, Redcare Pharmacy and HelloFresh from the Small Cap group saw a greater than 10% month-on-month decrease in short fund counts.

APAC: Top Movers (>10% Month-on-Month Change in Fund Counts)

Long crowding increases

• Large Cap: Sony
• Mid Cap: Aisin and Dai-Dan

Short crowding increases

• Large Cap: Toyota, Xiaomi, Panasonic and Nippon Steel
• Mid Cap: Nitto Boseki, M3 and Hankyu Hanshin
• Small Cap: Deep Yellow and Nankai

Note: Mitsui-Soko and PWR from the Small Cap group saw a greater than 10% month-on-month decrease in short fund counts.

Methodology

The Hazeltree Crowding Report - H1 Review 2026 is based on anonymized and aggregated positioning data from Hazeltree’s proprietary securities-finance platform, which reflects trading activity from its hedge fund client base of more than 600 global funds. It calculates the crowding score by sector and region (Americas, EMEA and APAC) and analyses both long and short crowding from January to June 2026.