Goldman Sachs: Semiconductor Rally Set to Extend as Funds Rebuy Storage and Equipment Stocks

According to Goldman Sachs on July 23, the bank's trading desk believes the semiconductor rebound is likely to continue. The report notes that hedge funds have liquidated approximately 80% of their cumulative net long positions in global semiconductor and equipment stocks since mid-June, but over the past one to two days, funds have resumed buying. The most concentrated buying is in previously hard-hit storage and semiconductor equipment sectors.

Goldman Sachs highlighted recent buying activity in storage stocks STX, WDC, MU, and SNDK, alongside equipment stocks AMAT, ASML, and LRCX. Global semiconductor net positioning has eased from a 24% peak in June to approximately 19% of global Prime Book, though it remains at the 84th percentile over one year and 97th percentile over five years. The bank assessed that while semiconductor positioning remains elevated, extreme crowding has subsided, and barring continued earnings or AI capex deterioration, some funds may selectively add back positions in the hardest-hit but fundamentally supported areas.