Institutional Skepticism at the Epicenter of Growth: Preparation for Rotation or Structural Risk?

Hedge Funds and Mutual Funds Clearly Underweight in Tech Despite Strong Forward EPS Revisions

Positioning in the Tech Sector

Large growth stocks and the technology sector remain cautiously positioned.

$7 Trillion: Low Exposure

According to the latest Goldman Sachs HF Monitor and Mutual Fundamental report, which covers $7 trillion in combined U.S. equity positions (as of the end of Q1 / beginning of Q2), technology is clearly underweight. While the data may be slightly lagging, the breadth of coverage brings important conclusions: both hedge funds and mutual funds remain significantly underweight in technology.

Mutual Funds and the “Magnificent Seven”

Mutual funds hold a position of -720 basis points relative to the Mag7. This is a serious deficit.

Positioning in AI and TMT

Positioning in the sectors of artificial intelligence, telecommunications, media, and technology is at the bottom of the trend line.

Rare Divergence in NASDAQ

Such a divergence between the NASDAQ price and non-dealer positioning is not often observed. Could this be interpreted as hidden demand — or a warning signal?

On the Topic of NVIDIA

According to GS trading desks:

“Positioning is at 7.5 out of 10. The stock is about ~50% above the April low but remains range-bound over the past 12 months — amid normalized earnings surprises and mixed headlines (geopolitics, AI returns, competition).”

“Pure Growth” Trading Exceptionally

The “Pure Growth” factor is performing very strongly — currently at the upper limit of the multi-year trend.

Still Growing

For those in doubt — the Mag7 are certainly still growing. Here’s the forecasted sales growth over the next 5 years:

• Nvidia: +189%
• Tesla: +107%
• Microsoft: +101%
• Meta: +79%
• Netflix: +68%
• Amazon: +57%
• Alphabet: +42%
• Apple: +28%