Hedge funds are a lot more skittish for this round of Magnificent 7 earnings
Contributor since / Followers
Jose Luis Pelaez Inc
Hedge funds have snapped up shares of the biggest of the megacap stocks this month, but aren’t as confident as they have been in previous earnings seasons.
Five of the Magnificent 7 stocks report this week: Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), Meta (NASDAQ:META) and Microsoft (NASDAQ:MSFT).
Tesla (TSLA) already impressed when it released numbers last week, burning shorts to the tune of $3.5B. Nvidia (NVDA) doesn’t report until Nov. 20.
But while hedge funds have been buyers of the group in October, the positioning is much lighter compared to before first- and second-quarter earnings seasons of 2024.
The group is “net bought in Oct MTD, driven by short covers and to a lesser extent long buys,” Goldman Sachs’ FICC and Equities desk wrote.
“From a positioning standpoint, however, the group’s Net allocation and long/short ratio are both well below their respective levels going into Q1 and Q2 earnings.”
