Hedge funds have increased their exposure to AI-related tech hardware to the highest level since 2016, according to a client note from Goldman Sachs seen by Reuters. The buying has focused on semiconductors and chip-equipment stocks, signalling strong conviction that the AI hardware cycle still has runway. Analysts at Goldman said funds are shifting away from the mega-cap ‘magnificent seven’ and into companies with direct exposure to AI infrastructure. Long positions are predominant and activity is concentrated in U.S. and Asian tech names.