Goldman Sachs: Hedge Funds Dump U.S. Tech Stocks at Record Pace
Alina Collins
Goldman Sachs data shows hedge funds have cut U.S. tech exposure by roughly 10% over two months — the largest single-sector retreat in over a decade — signaling a systematic reassessment of AI-driven valuations.
How severe is this sell-off?
Hedge funds were net sellers of U.S. tech in six of the past eight weeks, trimming market-value exposure by roughly 10% — the biggest single-sector exit in Goldman's prime-brokerage data going back over a decade.
This means → this is not a handful of funds rebalancing; the hedge-fund community is moving in one direction, steadily and at scale.
Goldman's prime-brokerage head Vincent Lin's team said outright: signs of "partial capitulation" are beginning to appear.
What are they selling, and how?
Tech was last week's worst-performing sector by a wide margin and the largest net-sold sector across all U.S. equities.
The selling is a two-sided squeeze: long positions cut and short bets added simultaneously.
By sub-sector, tech hardware, storage & peripherals, and IT services saw the heaviest net selling; semiconductors and software were sold less aggressively.
Why the rush for the exits now?
The S&P 500 Information Technology Index has fallen roughly 10% since early June, building profit-taking pressure.
The deeper driver: investors increasingly doubt whether AI-fueled valuations can hold, while fears grow that big tech may cut AI capital spending.
In plain terms = the "AI lifts everything" thesis is being stress-tested — those sitting on gains are cashing out, and the less convinced are following.
Where is the money going?
Capital is rotating into consumer stocks and other sectors; market interest is visibly broadening.
Goldman strategist Ben Snider's team noted that "violent swings in popular AI-infrastructure names" have revived interest in other parts of the market.
This reflects a telling signal: money is not moving to the sidelines — it is looking for certainty beyond the AI narrative.
What comes next?
Goldman's view: historical patterns, current positioning, and a lack of positive catalysts all point to the AI-infrastructure momentum trade facing continued near-term headwinds.
Yet Goldman also stresses that tech fundamentals remain solid — what is being sold is the valuation premium, not the business itself.
This means → near-term pressure on tech stocks comes from position unwinding, not earnings deterioration; the turning point hinges on when AI spending expectations stabilize again.
Content is for reference only, not financial advice.