Hedge Funds Sell Global Tech Stocks at Fastest Pace in Two Years
Hedge funds are selling global tech stocks at the fastest pace in two years, with Goldman Sachs data showing that net selling has reached a near-record level. Semiconductor stocks and the Magnificent 7 have seen continuous reductions in holdings, with some positions dropping to near three-year lows as funds shift to other sectors. Institutional risk appetite has cooled due to event-driven factors, benefiting defensive assets while putting pressure on overvalued tech and AI-related stocks.
Source: Public Information
ABAB AI Insight
Hedge funds previously significantly increased their holdings in tech stocks during the AI boom. Historically, the pattern has been to concentrate holdings in the Magnificent 7 and semiconductors from 2023 to 2025, followed by rapid deleveraging in mid-2026 due to increased valuations and volatility, with Goldman Sachs brokerage data capturing this extreme net selling.
On the capital path, a dual reduction in long and short positions has lowered tech exposure by about 10%, motivated by profit locking and avoidance of further correction risks, while rotating funds into consumer and defensive sectors, reflecting a reassessment of the sustainability of AI capital expenditures by institutions.
Similar cases can be seen in the institutional sell-off during the tech bear market of 2022. The current market is in a transitional phase from crowded trades to diversified allocations, with consecutive weeks of selling becoming a sentiment reversal signal.
This essentially represents a transfer of pricing power: shifting from retail and momentum-driven funds to hedge funds actively reducing risk. The mechanism involves forced liquidation of highly leveraged positions during volatility, accelerating prices toward fundamentals.
ABAB News · Law of Cognition
- Fastest sell-offs often occur at high points
- Institutional reductions precede index peaks
- The end of crowded trades is a collective exit.