The UBS trading department said that the sharp sell-off in momentum stocks may be coming to an end, providing investors with an opportunity to rebuild their positions in artificial intelligence and semiconductor stocks. According to UBS's main brokerage business data, hedge funds have begun to close long positions in momentum stocks and semiconductor stocks, accounting for about 5% of the total market value. This is one of the largest position reductions on record. This has brought the net positions of semiconductor and software stocks back to April levels. Despite a correction in the market, Michael Romano, head of UBS hedge fund stock derivatives sales, said in a report to clients that improving AI fundamentals are sending a signal to buy on dips. However, he recommended that investors gradually open positions rather than rush to buy everything at once. The core of the momentum strategy is to buy the best performing stocks while shorting the worst performing stocks. Romano wrote, “The de-risking of momentum strategies was not only in the past, but is still a firm judgment. It is prudent to gradually open positions.” UBS's momentum stock basket includes SanDisk, Broadcom, Oracle, KKR & Co. Companies such as Inc., Datadog Inc. and Microsoft.

The UBS trading department said that the sharp sell-off in momentum stocks may be coming to an end, providing investors with an opportunity to rebuild their positions in artificial intelligence and semiconductor stocks. According to UBS's main brokerage business data, hedge funds have begun to close long positions in momentum stocks and semiconductor stocks, accounting for about 5% of the total market value. This is one of the largest position reductions on record. This has brought the net positions of semiconductor and software stocks back to April levels. Despite a correction in the market, Michael Romano, head of UBS hedge fund stock derivatives sales, said in a report to clients that improving AI fundamentals are sending a signal to buy on dips. However, he recommended that investors gradually open positions rather than rush to buy everything at once. The core of the momentum strategy is to buy the best performing stocks while shorting the worst performing stocks. Romano wrote, “The de-risking of momentum strategies was not only in the past, but is still a firm judgment. It is prudent to gradually open positions.” UBS's momentum stock basket includes SanDisk, Broadcom, Oracle, KKR & Co. Companies such as Inc., Datadog Inc. and Microsoft.