Hedge funds are holding their most concentrated wagers on US equities than anytime in the past 22 years, according to data from Goldman Sachs Group Inc.

An index created by the investment bank to track crowding across hedge funds has reached a record high, according to a report published on Monday, which said the average fund holds 70% of its long portfolio in its top 10 positions.

The most popular bets remain in megacap tech, with Microsoft Corp. Amazon.com Inc. and Meta Platforms Inc. in Goldman’s list of “Hedge Fund VIPs” this quarter. A group of seven tech companies account for about 13% of the average hedge fund long portfolio, twice the weighting from the start of 2023, Goldman’s analysis show.

The data paints a picture of a market that’s quickly regaining its enthusiasm for profitable and stable tech stocks as economic growth weakens at the end of the Federal Reserve’s campaign to raise interest rates. The Nasdaq 100 Index has jumped 14% since reaching a low in late October.

Hedge funds are riding the momentum of tech stocks and also searching for ways to profit from the popularity of weight-loss drugs, wrote Goldman strategists including Ben Snider. Eli Lilly & Co., which won US approval for its weight-loss drug Zepbound, was among the stocks with the biggest increase in hedge fund popularity last quarter. 

Goldman said it analyzes data from 735 hedge funds with $1.6 trillion in long equity positions and $797 billion short.

This article was provided by Bloomberg News.