GS Hedge Funds Crowding Monitor — What is crowded in US Equities

Hedge Funds Crowding Monitor — US

Shorts are building aggressively across Broad AI and Data Centers, while Software sees a rare bullish flip. Below, we highlight the key movements:

 Broad AI (GSTMTAIP) short crowding flipped from -0.05 to 0.19 (99th percentile), and AI Data Centers (GSTMTDAT) short crowding moved from -0.22 to 0.01 (87th percentile), crossing into crowded territory from uncrowded. Both themes saw slight easing in long crowding, but remain long crowded with z-scores of 0.75 and 0.74 respectively. The simultaneous short build across both themes, even as long crowding holds near prior levels, suggests funds are layering hedges on top of existing AI longs.

 Software & Services (SPLRCIS) saw a dramatic short-side flip, with short crowding collapsing from a z-score of 0.50 to -0.51 (the lowest short crowding reading in the trailing 6-month range ) while long crowding flipped from -0.01 to now being crowded at 0.14 (67th percentile). This rotation signals a clear shift in sentiment. In contrast, Semis & Semi Equipment (SPLRCSE) short crowding jumped from 0.22 to 0.53 (99th percentile), while long crowding eased modestly from 0.40 to 0.34.

 Equity REITs (SPLRCREC) short crowding flipped from uncrowded to crowded, jumping from -0.06 to 0.38 (98th percentile), while long crowding moved deeper into uncrowded territory from -1.05 to -1.12. Similarly, Utilities (SPLRCU) short crowding surged from 0.14 to 0.57 (99th percentile) while remaining uncrowded on the long side at -0.66. Increasing short crowding in both rate-sensitive sectors suggests funds are positioning for a higher-for-longer rate environment.

 Transportation (SPLRCTRN) is now the most crowded long among US sectors with a z-score of 0.93 (98th percentile), up sharply from 0.41, while short crowding also increased to 0.89 (55th percentile).

Crowding scores are expressed as z-scores — measuring the number of standard deviations from the mean — and typically range from −2 to +2. A score above 0 indicates crowded positioning, while a score above +1 indicates highly crowded positioning. For full methodology and definitions, refer to the Methodology and Definitions section below.

Exhibit 1: Crowding Overview: US Sectors and Themes

Exhibit 2: Sector Crowding: Long & Short Side