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US software stocks to keep rebounding, says Goldman Sachs prime brokerage note

Kitco Media
By Reuters
Published:
Updated:
Reuters
US software stocks to keep rebounding, says Goldman Sachs prime brokerage note teaser image

LONDON, Feb 26 (Reuters) - Goldman Sachs prime brokerage said in a note that the recent bounce in software and IT services stocks may continue, even though this week, hedge funds were as short as they have ever been on the sector.

A short position expects an asset price to fall.

The S&P 500 software and services index <.SPLRCIS, opens new tab> has over 18% this year so far, shedding more than $1.2 trillion in market value, according to LSEG data. But this week, stocks in this index recovered and the index rose over 4%

Key findings of the Goldman report:

Goldman Sachs prime brokerage believes that the recent recovery in software stocks will continue, it said in a note to clients on Wednesday, seen by Reuters on Thursday.

Software and IT services were the top two shorted U.S. industries on February 24th on Goldman Sach's prime brokerage trading desk.

Short positions have risen to the highest level on record for Goldman, which began tracking positions in 2016.

Long positions, betting these stocks will rise, stand at a record low.

Reporting by Nell Mackenzie; editing by Dhara Ranasinghe

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