UBS: After Historic Sell-off, Recommends Gradually Rebuilding Positions in AI and Semiconductor Stocks

Odaily reported that according to UBS prime brokerage data, hedge funds have reduced their long positions in momentum and semiconductor stocks by approximately 5% of total market value, one of the largest reductions on record. Net holdings in semiconductor and software stocks have fallen back to April levels. UBS believes the sell-off in momentum stocks is nearing its end, expects this round of selling to bottom out by the end of July, and advises investors to gradually rebuild positions in AI and semiconductor stocks. The recent gains in cyclical stocks such as banks and industrials are mainly driven by short covering. If capital returns to AI, the aforementioned sectors could face downward pressure. (Cailianshe)