Hedge Funds Sell Software Stocks as AI Splits Tech, Goldman Says

Hedge funds are unloading software stocks as concerns mount about who’ll be left behind in the artificial intelligence boom.

Last week, funds sold information technology shares by the most in 11 weeks, with software accounting for more than 60% of it, according to Goldman Sachs Group Inc.’s prime brokerage desk report for the week ended May 31. Hedge funds’ net exposure to software is now the lowest it’s been in more than five years, according to Goldman.

“A number of managers spoken to by PivotalPath have rotated out of software as a service (SaaS) stocks in favor of AI/semis,” ...