Investing.com -- Hedge funds have been trimming their positions in U.S. semiconductor stocks following a substantial rally in the sector, locking in gains whilst maintaining their broader commitment to artificial intelligence-related investments, according to analysis from Goldman Sachs, cited by Bloomberg in an article on Thursday.

Data from Goldman's prime brokerage desk is said to show that semiconductors and semiconductor equipment were the most heavily net-sold US subsector over the past month, with funds reducing long positions rather than building fresh short bets against the industry.

The sector has now moved to a net-sold position for the year to date.

The profit-taking comes after a near-vertical ascent for chip stocks. Goldman's AI semiconductor basket has outperformed the S&P 500 by more than 50% this year, whilst the broader index itself gained more than 18% between late March and a recent three-day pullback.

South Korea's Kospi index, closely watched as a barometer of global appetite for AI infrastructure, briefly surpassed 8,000 points for the first time in mid-May, extending its year-to-date advance beyond 80% before retreating sharply.

Goldman's prime desk characterized the moves as portfolio management rather than a change of conviction on AI, noting that overall exposure to US artificial intelligence stocks tracked by its technology, media, and telecommunications basket remains near record highs.

Funds have simultaneously increased short positions in broad equity index and exchange-traded fund instruments as a hedge against wider market risks, with those positions now at a decade-long peak.

The Goldman team noted that overall gross leverage has risen to a fresh five-year high this month, though net leverage has remained relatively stable, which is a setup described as inconsistent with the kind of euphoria currently visible among retail investors.