Hedge Funds Reenter Tech and AI-Vulnerable Software

In early 2026, hedge funds are selectively re-entering large-cap technology and beaten software after weeks of selling driven by AI-disruption fears, according to prime-brokerage flow and notes cited by Reuters and JPMorgan. Managers are rebuilding gross exposure, cautiously raising leverage as volatility stabilizes, and favoring long mega-cap names while pairing them with shorts in vulnerable software for relative-value bets.