UBS: After Historic Sell-off, Recommend Gradually Rebuilding AI and Semiconductor Stock Positions

According to UBS prime brokerage data, hedge funds have reduced their long positions in momentum stocks and semiconductor stocks by approximately 5% of total market value, marking one of the largest reductions on record. Net holdings in semiconductors and software stocks have retreated to April levels. UBS believes the sell-off in momentum stocks is nearing its end and expects it to bottom out by the end of July, advising investors to gradually rebuild positions in AI and semiconductor stocks. The recent uptrend in cyclical stocks such as banks and industrials was primarily driven by short covering; if capital returns to AI, these sectors may face downward pressure. (Cailianshe)