Woofun AI reports that dip buying has driven a rebound in U.S. equities, with semiconductor stocks leading the recovery as investors maintain confidence in the artificial intelligence sector. UBS trading desk analysis suggests the recent sell-off in momentum stocks may be concluding, presenting opportunities to rebuild positions in AI and chipmakers.

UBS prime brokerage data indicates hedge funds reduced long positions in momentum and semiconductor stocks by approximately 5% of total market capitalization. This represents one of the largest recorded reductions, implying that significant speculative leverage has already been unwound, which may support a sector bottom.