Hedge Funds Push Utilities Short Interest to 3.2% As Investors Favor AI Companies

Hedge funds are making a blunt call on the AI trade. While staying bullish on mega-cap AI leaders, US funds have been aggressively shorting utilities and weaker AI-adjacent stocks. Utilities sector short interest jumped 0.3 percentage points to 3.2%, a level Goldman Sachs says is “one of the highest ever.” The bet shows investors doubt utilities will capture real value from the soaring energy demands of AI data centers.

• OracleORCL
  , IntelINTC
  , and GE VernovaGEV
  are now among the most shorted stocks by dollar value, with $5.4B, $4.6B, and $4.1B, respectively.
• TeslaTSLA
  remains near the top of heavily shorted stocks, while JPMorganJPM
  surprisingly appears at the fourth spot on the list.

Reading the tea leaves: This split shows hedge funds believe the companies powering AI will not share equally in the upside. By staying long on dominant AI leaders and shorting utilities and secondary tech names, managers are essentially betting on winner-takes-most dynamics — where mega-cap leaders capture the lion’s share of AI economics while ancillary players struggle with thin margins despite surging demand.