Commercial Awareness Update: May 26th 2026

Catch-up: Commercial Awareness Update (23rd May) | Deep Dive: Why Hedge Funds Are Splitting Into Two Very Different Worlds

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Three big stories dominating markets this week.

Each one is worth understanding properly because they connect to bigger themes that keep coming up in finance and in interviews.

Here's what's happening:

Let's go!

This is the biggest macro story in markets right now and has been since late February.

Here's a bit of background.

On 28th February 2026, the US and Israel launched a major joint military operation against Iran. The strikes targeted Iran's nuclear programme and senior leadership, including Supreme Leader Ali Khamenei, who was killed. Iran retaliated with missile and drone attacks across the region and moved to close the Strait of Hormuz.

The Strait of Hormuz is one of the most important trade routes in the world. Around 20% of global petroleum and 20% of liquified natural gas passes through it every year. When Iran effectively shut it down, the impact on energy markets was immediate and severe.

The US then launched a separate aerial campaign in March to reopen the strait, destroying Iranian naval vessels and mine-laying boats. A naval blockade of Iran followed in April.

Where things stand today is genuinely uncertain.

Trump said on social media last week that a peace deal was "largely negotiated." But as of this morning, Iranian officials are saying no agreement is imminent and that nuclear issues aren't even currently on the table. Oil prices reflect that uncertainty. Brent crude is sitting around $98 a barrel and US WTI is around $91, and any statement from either side can move those numbers meaningfully within hours.

Why this matters beyond the headlines.

The Strait of Hormuz situation is a live example of how geopolitical risk feeds into financial markets.

When the strait was effectively closed, energy prices spiked, shipping insurance costs surged, and supply chains for countries that depend on Gulf oil, including Japan, South Korea, and parts of Europe, came under serious pressure. Gulf exporters like Iraq and Kuwait, which rely on the strait to ship their primary source of revenue, were squeezed almost immediately.

There's also a second-order effect that's easy to miss. Higher oil prices sustained over months feed back into inflation. That gives central banks less room to cut rates. Which keeps borrowing costs higher for longer. Which affects deals, valuations, and capital markets activity.

Everything connects.

The honest outlook right now is that a deal before June looks unlikely based on current signals. But markets are trading on hope more than certainty, which is why you're seeing volatility in oil and why this story is worth following closely.

Goldman Sachs published its Hedge Fund Trend Monitor this week and the findings are striking.

Hedge funds entered Q2 2026 with the most elevated exposure to semiconductor companies in recorded history. 10% of long portfolio weight is now sitting in semis alone. The net tilt toward the information technology sector rose by 853 basis points in a single quarter, which Goldman described as the largest quarterly increase to that sector on record.

The biggest beneficiaries have been semiconductor manufacturers and AI infrastructure companies. Names like Lam Research, Applied Materials, Analog Devices, Micron, and Intel saw the largest increases in hedge fund ownership.

At the same time, hedge funds are dumping software. The weight in software stocks has fallen to 6%, the lowest since 2019.

Why the distinction?

The market is making a judgement about where in the AI value chain money is actually being made right now.

Software businesses still need to prove that AI features translate into real revenue growth and improved margins. That proof is taking longer than investors hoped. Hardware and infrastructure, the picks and shovels of the AI boom, have clearer near-term demand because you don't need to wait for AI monetisation to happen if you're supplying the chips and data centres that everyone building AI needs right now.

Goldman's own research adds useful context here. Agentic AI could drive a 24-fold increase in token consumption between 2026 and 2030, and chipmakers may face supply shortages for the next 12 to 18 months as new plants are built. That kind of forward-looking supply constraint is exactly what concentrated hedge fund positioning is built around.

There's a caveat worth noting though. Short interest for the median S&P 500 stock has climbed to its highest level since 2011. Hedge funds aren't uniformly bullish. They're making very concentrated bets on AI winners while hedging heavily against the broader market. That combination can unwind quickly if the AI trade disappoints.

For context, the most popular hedge fund tech positions have returned 62% year to date. That's an extraordinary number. It also means the trade is very crowded, which is both a reason the momentum continues and a reason to watch carefully for when it turns.

Use these resources to get ahead before application season commences:

Breaking Into Banking | Finance Fast Track

Delivery Hero confirmed last weekend that it received a takeover proposal from Uber at €33 per share. The Financial Times reported that Uber then approached a major shareholder with a higher offer of €38 per share, which was rebuffed.

Delivery Hero's shares jumped 10% on the news. The company said it remains focused on its strategic review and has not accepted any offer.

Some background on why this is happening now.

Delivery Hero launched a strategic review in December 2025. That's effectively corporate language for being open to a sale, spin-off, or asset disposals. Activist investor Aspex escalated pressure on the company in March. The CEO announced a step-down timeline in May. The company is, in other words, genuinely in play.

Uber already holds a significant economic stake in Delivery Hero, which gives it leverage and strategic optionality before any binding offer exists.

Why does Uber want this?

Food delivery globally is consolidating fast.

In the same period, DoorDash has been pursuing Deliveroo in the UK and Prosus agreed to buy Just Eat Takeaway. The pattern is clear. The major players are racing to build scale before the market settles into two or three dominant platforms per region.

For Uber, acquiring Delivery Hero would significantly extend its footprint across Europe, Asia, and the Middle East. Delivery Hero's operating density, which simply means how concentrated its orders are in the cities it operates in, is the core strategic asset here. That kind of density is very difficult to build from scratch and makes an acquisition far more attractive than trying to grow organically.

The regulatory risk is real though. Any deal would face antitrust scrutiny market by market, and in regions where Uber Eats and Delivery Hero both operate, forced divestments would likely be required as part of any approval process.

Whether a deal happens or not, this story is worth following because it illustrates something broader about where the food delivery industry is heading. The era of cash-burning growth at all costs is over. The players that survived are now consolidating. And the question for the next few years is which two or three platforms end up controlling each major market.

Three very different stories this week but they all connect to the same underlying theme.

Markets are being driven by uncertainty right now. Uncertainty about whether the US and Iran reach a deal. Uncertainty about whether AI monetisation actually delivers the returns hedge funds are betting on. Uncertainty about which food delivery platforms survive long enough to dominate their markets.

And that uncertainty is important to understand because it's not a sign that markets are broken. It's how markets always work. Prices move because people genuinely disagree about what happens next. The investors who win over time aren't the ones who eliminate uncertainty. They're the ones who think more clearly about it than everyone else.

That's what commercial awareness actually is at its best. Not memorising what happened. Understanding why it happened and what it probably means for what comes next.

Keep that in mind when you're reading the news and when you're sitting in interviews.

Until next time, keep up the hard work!

Afzal

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