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Hedge funds upped short AI bets in July, Hazeltree says
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Hedge funds upped short AI bets in July, Hazeltree says
Aug 12, 2026 1:23 AM

LONDON, Aug 12 (Reuters) - Hedge funds upped short bets on AI-related stocks in July, according to a Wednesday report from data platform Hazeltree, part of a broad shift in the month that saw chipmaker shares tumble around the world 

Here are some details about hedge fund positioning in July:

-- Hedge funds increased short positions - bets that a price will fall - in chipmaker Super Micro Computer ( SMCI ) , as well as AI infrastructure firms Coreweave ( CRWV ) and Nebius Group ( NBIS ) , the report showed.

-- All three were in the top 10 most shorted stocks in July across the firm's hedge fund client base, which it says has more than 700 funds. They were also in the top 10 in June, but each saw that short positioning grow.

-- July saw some nervousness about chipmakers and the AI trade, on investor concern about valuations and the sustainability of their bumper revenues. U.S. chip stocks dropped 20%, while Korea's tech-heavy Kospi index fell 22%. - both indexes posted their biggest monthly fall since 2008.

-- Hedge funds also reduced long positions and raised short positioning in chip giant Nvidia ( NVDA ), Hazeltree said, though funds in aggregate were still long.

-- Coreweave ( CRWV ) shares jumped in extended trading on Tuesday after it beat second quarter estimates. High short positioning can contribute to dramatic moves higher in a share price - a so-called short squeeze - where a rally can force investors who are short to buy back the shares, even at a loss.

-- "Wall Street took profits in some of the year's biggest AI infrastructure winners without abandoning the trade altogether, instead redeploying capitalinto companies that have shown signs of monetisation. A similar unwind played out in leveraged semiconductor bets, with investors trimming borrowed risk rather than exiting AI exposure entirely," Hazeltree said.

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