Key facts
- Hedge funds increased bets against consumer stocks in August.
- Bets against AI-related stocks were reduced in August.
- Kimberly-Clark, DoorDash, and Keurig Dr Pepper are among the most-shorted large U.S. companies.
- Super Micro Computer, Coreweave, Nebius Group, and GE Vernova remained in the top 10 most-shorted AI-related stocks.
- Nine of the 20 most-shorted North American stocks were consumer-focused in August, up from four in July.
- Alphabet saw more funds shorting the stock than holding long positions for the first time this year.
Hedge funds increased their bets against consumer-focused companies in August, while reducing some positions against AI-related stocks, according to a report from data platform Hazeltree. The shift occurred as oil prices and global bond yields rose, increasing costs for consumers.
Consumer discretionary stocks have been the worst-performing sector on Wall Street this year, with a drop of around 5%, compared to an 11% gain in the S&P 500. Several consumer-focused companies, including Kimberly-Clark, DoorDash, and Keurig Dr Pepper, entered the list of most-shorted large U.S. companies. In Europe, automakers like BMW, drinks groups Diageo and Pernod Ricard, and luxury retailer Kering were also among the most shorted consumer-exposed stocks.
AI-related stocks, though seeing some reduction in short positions, still dominated the top 10 most-shorted list, with chipmaker Super Micro Computer, AI infrastructure firms Coreweave and Nebius Group, and GE Vernova remaining prominent. Overall, nine of the 20 most-shorted North American large and mid-cap stocks were consumer-focused in August, up from four in July.
Google's parent company, Alphabet, dropped out of Hazeltree's list of most-crowded long positions. For the first time this year, the number of funds shorting Alphabet's stock surpassed the number holding long positions. Hazeltree noted that this selling appeared to reflect funding questions rather than a view on the underlying business's strength, given billions of dollars being invested in AI.