US Mutual Funds Fall 107 Basis Points Underweight in AI Equities
US mutual funds are recording their largest underweight in AI equities, according to Goldman Sachs data. An analysis of 504 large-cap active mutual funds, representing about $4.6 trillion in equity assets, found that they were roughly 107 basis points underweight in AI-related stocks versus their benchmarks.
Nvidia was the biggest drag, with funds about 100 basis points underweight. AMD, Alphabet and Microsoft were also underweight by roughly 60, 70 and 50 basis points, respectively. Micron Technology was a notable exception, with an estimated 40-basis-point overweight.
The positioning has hurt performance. Only 36% of large-cap core and growth funds outperformed their style benchmarks during the period studied. Goldman also examined 991 hedge funds, which collectively managed about $5.4 trillion in equity assets. Hedge funds maintained greater AI exposure and adjusted positions more aggressively during the megacap technology rally.
The data suggests that active managers’ preference for cyclical and value stocks left them behind as AI equities gained market weight. For traders, continued benchmark concentration in Nvidia and other AI leaders could increase performance pressure on underweight funds and support further institutional buying. However, the crowded positioning also leaves AI equities vulnerable to sharp corrections if earnings, valuations or AI spending expectations weaken.
Neutral
The expected cryptocurrency-market impact is neutral because the article concerns US equity mutual-fund positioning rather than crypto assets directly. It provides no evidence of changes in Bitcoin, Ethereum or digital-asset fund flows.
In the short term, the report could still influence crypto sentiment indirectly. A continued rally in Nvidia and other AI equities may strengthen broader risk appetite and support speculative trading in crypto markets, particularly AI-related tokens. Conversely, a sharp reversal in crowded AI positions could trigger a wider risk-off move, pressuring cryptocurrencies alongside technology stocks.
The 107-basis-point underweight may create potential institutional buying pressure in AI equities as benchmark weights rise. Similar benchmark-driven reallocations during major technology rallies have often supported large-cap growth stocks, while sudden valuation concerns have produced correlated selling across equities and crypto. Over the longer term, the key market indicators are AI earnings, semiconductor demand, technology valuations, interest rates and institutional risk appetite. Without a direct crypto catalyst, the most likely outcome is limited immediate impact and higher sensitivity to broader equity-market volatility.