Hedge funds and other professional investors’ favorite bets are crushing the market, posting a near 30% rally this year, according to Jefferies. The Wall Street firm looked at recent regulatory filings from hedge funds and long-only fund managers and found the most-popular holdings among both groups, calling them “uber crowded” trades. As a group they are up 28.5% year to date. Meanwhile, the S & P 500 is about 19% higher this year. A number of stocks tied to artificial intelligence showed up in the “uber crowded” portfolio. Microsoft is the most popular name among professional traders, based on the net long weighting. Earlier this year, the company expanded a multiyear, multibillion-dollar investment in ChatGPT maker OpenAI. Microsoft shares are up more than 40% in 2023. Nvidia has been one of the biggest winners in the latest AI boom. The chip giant topped a $1 trillion market capitalization after a shockingly strong forecast in May of future demand. Alphabet is also well-loved by hedge funds and long-only mutual funds. The YouTube parent has climbed nearly 50% this year as its Google internet search engine recently announced it will add AI features . The company has attracted investments from high-profile investors including Bill Ackman, Stanley Druckenmiller and Dan Loeb. Meanwhile, Meta Platforms , whose shares have soared more than 160% in 2023, has touted its own AI computer chips . Software company Adobe and health care name Elevance Health are also on the list of crowded trades.
