Hedge funds increased AI short bets in July: Hazeltree

Hedge funds increased their short positions on artificial intelligence-related equities in July, according to data from financial technology firm Hazeltree.

The firm, which provides liquidity and risk management solutions to hedge funds, reported a rise in bearish bets targeting companies tied to AI advancements. The increase follows a period of heightened volatility in tech stocks, particularly those benefiting from AI-driven growth narratives.

Hazeltree’s data reflects broader market sentiment shifts, with some investors adopting a more cautious stance on AI valuations amid concerns over sustainability and profitability. The firm did not disclose specific names or the total scale of the short positions.

The move underscores growing skepticism among certain hedge funds regarding the pace of AI adoption and its long-term financial impact on corporate earnings. Analysts note that while AI remains a transformative technology, near-term market dynamics may be influenced by profit-taking and valuation adjustments.

The trend comes as major tech firms continue to report strong revenue growth from AI-related products, though some investors question whether current stock prices fully reflect potential risks, including regulatory scrutiny and competition.