By Anirban Sen and Carolina Mandl

NEW YORK (Reuters) -Wall Street’s largest hedge funds, Bridgewater Associates, Tiger Global Management and Discovery Capital, increased their exposure to Big Tech in the second quarter amid a generational boom in the growth of artificial intelligence.

During the June quarter, hedge funds cut their exposure to laggards in industries like aerospace and defense, and consumer and retail, as part of a broader move back to momentum investing.

It marks a big shift from earlier this year when bets on Big Tech had soured for top money managers due to tariff-fueled volatility in financial markets, with investor concerns around rising inflation and fears of a bubble in AI triggering a sell-off in “Magnificent Seven” stocks.

Since then, tech stocks have staged a b

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