Hedge Funds Were Net Sellers of U.S. Tech Stocks Last Week at Largest Pace in a Decade
N.R. Finch
In the week ending June 25, hedge-fund net selling of US information-technology stocks hit a 10-year record with a z-score of -4.0 — a 4-sigma statistical outlier signaling systematic institutional de-risking, not routine rebalancing.
How rare is this sell-off?
Goldman Sachs prime-brokerage data show net selling of IT — in both dollar and notional terms — at the largest level in a decade.
The z-score (a measure of how far a reading deviates from normal) reached -4.0, a 4-sigma event. This means → under normal market conditions, a sell-off this extreme would occur roughly once every 60 years.
In plain terms = this is not ordinary profit-taking — hedge funds are moving money out of tech at a pace that is, statistically, almost off the chart.
Who is selling, and how?
Net selling was driven by both long and short disposals, in a ratio of 1.3-to-1. This means → it is not just shorts pressing bets — longs that previously favored tech are actively unwinding.
Semiconductors and semiconductor equipment led the selling, with 8 consecutive trading days of net outflows, accounting for more than half of the week's dollar net selling in IT.
Software, tech hardware, and communications equipment followed — the sell-off spread across every major IT sub-sector.
After all that selling, are positions actually lighter?
Despite the heavy outflows, semiconductor net exposure still sits at the 98th percentile over five years. In plain terms = even after this wave of selling, positioning remains higher than at virtually any point in the past half-decade.
This reflects how extreme the prior concentration was — deleveraging pressure has not fully unwound.
The "Mag 7" basket has now been net-sold for five straight weeks; gross long and short exposures have fallen to three-year lows at the 4th and 6th percentiles respectively — mega-cap tech positioning is approaching near-flat levels.
Is tech the only sector being sold?
No. US equities overall saw net selling for a second consecutive week, at the fastest pace since "Liberation Day."
The broad-market z-score hit -4.2 — even more extreme than tech's -4.0. The long-to-short selling ratio was 1.9-to-1, with longs retreating harder.
Eight of 11 sectors were net-sold: tech, communication services, industrials, and healthcare led; only consumer staples, energy, and real estate saw net buying. This means → capital is rotating from growth into defensives — a textbook risk-off signal.
Content is for reference only, not financial advice.