These 10 stocks matter the most to hedge funds right now

Hedge funds this year have struggled, mostly on their big bets on the technology sector, though of late their performance has improved.

An average gain of 4% for equity hedge funds in the last two months has helped pull their performance against the broader market to roughly even for the year, according to an analysis from Goldman Sachs.


HFR, FactSet, Goldman Sachs Global Investment Research

A team of analysts looked at 795 hedge funds’ long positions at the start of the third quarter based on filings as of Aug. 15 and published its 50-strong VIP list of “stocks that matter most” that appear most frequently among the top 10 long holdings within hedge fund portfolios.

Company

Ticker

Sub-sector

Number of funds with stock as top 10 holding

Total return year-to-date, %

Amazon.com Inc

AMZN,
+0.31%
Internet & Direct Marketing Retail

92

-15

Microsoft Corp.

MSFT,
-0.14%
Software

84

-13

Alphabet Inc.

GOOGL,
+0.09%
Interactive Media & Services

55

-17

Meta Platforms Inc.

META,
+0.90%
Interactive Media & Services

51

-48

Visa Inc.

V,
-0.06%
Data Processing & Outsourced Services

37

0

Apple Inc.

AAPL,
-0.19%
Technology Hardware Storage & Peripherals

36

-2

Uber Technologies

UBER,
+3.96%
Trucking

34

-28

Mastercard Inc.

MA,
-0.46%
Data Processing & Outsourced Services

25

0

Berkshire Hathaway

BRK.B,
+0.28%
Multi-Sector Holdings

22

+2

ServiceNow Inc.

NOW,
-0.56%
Systems Software

19

-25

Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research

Hedge fund of late have cut leverage and shifted back toward growth stocks, buying the likes of Apple and Amazon. The switch came from hedge funds slashing their positions in the energy and materials sector.

NVIDIA topped Goldman’s list of the largest short positions as of the end of July, a prescient call given the company’s profit warning in early August.

Related: Cathie Wood’s ARK Invest cuts its stake in the graphics chipmaker ahead of its results.

Here are the top 10 stocks with the largest short positions:

Company

Ticker

Sub-sector

Total return year-to-date, %

Value of short interest as of Jul. 29, $ billion

NVIDIA Corp.

NVDA,
-0.62%
Semiconductors

-36

6.1

Amgen Inc.

AMGN,
-0.67%
Biotechnology

14

4.3

Occidental Petroleum

OXY,
+1.72%
Integrated Oil & Gas

125

4

Exxon Mobil Corp.

XOM,
+0.60%
Integrated Oil & Gas

59

3.5

Chevron Corp.

CVX,
-0.09%
Integrated Oil & Gas

39

3.1

Pfizer Inc.

PFE,
-0.44%
Pharmaceuticals

-16

3

International Business Machines

IBM,
-0.61%
IT Consulting

8

3

Texas Instruments

TXN,
-0.78%
Semiconductors

-3

2.9

S&P Global Inc.

SPGI,
+0.25%
Financial Exchanges & Data

-18

2.9

KLA Corp

KLAC,
-0.72%
Semiconductor equipment

-10

2.9

Source: FactSet, data compiled by Goldman Sachs Global Investment Research

Companies that see large increase in hedge fund holdings, Goldman Sachs says, can be strong signals for future stock performance.

Rising Stars, they call them, have typically ended up outperforming its peers during the quarters following their rise in popularity.

Rising Stars in the report include tech infrastructure company Switch Inc,
SWCH,
+0.10%

which saw 23 hedge funds pour in during the second quarter, and energy firm Chevron Corporation
CVX,
-0.09%
,
which had 20 more hedge funds own the stock.

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