Hedge funds have raised their exposure to artificial intelligence-linked technology hardware to the highest level since Goldman Sachs began tracking the data in 2016, according to a report by Bloomberg citing a client note from the bank.

Goldman said hedge fund buying has been concentrated in semiconductor and chip-related stocks – industries that tend to rise and fall with the broader economy – signalling that investors expect continued market momentum.

Most of the recent positioning reflects long bets on US and Asian tech companies. The surge in semiconductor exposure marks a shift away from the “Magnificent Seven” mega-cap tech names and U.S. power firms, which previously benefited from AI-related infrastructure demand.

Goldman noted that the rotation into semiconductors and related equipment began in September. Buying in Asian technology names has also boosted emerging market inflows, excluding China, where hedge fund positioning has reached multi-year highs.