Nearly 80% of Nasdaq Long Positions Underwater as Citi Warns of Tech Sell-Off Risk
Alina Collins
Citi's strategy team warns that nearly 80% of Nasdaq 100 long positions are now losing money, while Goldman data shows hedge funds hit a decade-high in net tech selling — suggesting the sell-off is far from over.
What exactly is Citi worried about?
Citi strategist David Chew's team notes that Nasdaq long positioning remains significantly larger than shorts, out of proportion with this month's roughly 2% decline.
This means → the index has fallen, but the longs haven't left yet. If stop-losses trigger in clusters, selling pressure feeds on itself.
In plain terms = too many people are sitting on losing bets and haven't sold — that overhang is the fuel for the next leg down.
What are hedge funds doing?
Goldman Sachs prime-brokerage data shows hedge funds posted the largest net selling of US tech in over a decade last week, in both absolute and relative terms.
This means → the fastest-moving institutional money is already heading for the exits, while retail and long-only holders have yet to follow.
This reflects a substantive erosion of professional conviction in AI valuations — not just verbal skepticism.
Where is the money going?
Citi notes bearish fund flows into both the Nasdaq 100 and S&P 500, with capital rotating toward the Russell 2000 small-cap index.
In plain terms = investors aren't leaving equities — they're moving house from large-cap tech into small caps. A style rotation is underway.
This means → confidence in big-tech leadership hasn't stabilized, and positioning adjustment still has room to run.
How bad is this month in historical context?
The Nasdaq 100 is down nearly 2% this month, on track for its worst June since 2022.
The catalyst: persistent doubts over AI-driven valuations, with US mega-cap tech stocks leading the decline.
This means → the issue isn't a single event but a broader re-examination of the valuation narrative — the drawdown may look modest, but the trend signal matters more than the number itself.
Content is for reference only, not financial advice.