Hedge Funds Cut Tech Stocks at Record Pace, Goldman Says

3-line summary

• Goldman Sachs' prime brokerage desk said hedge funds reduced technology-stock positions at close to the fastest pace in at least a decade over the five trading days through October 15; overall gross trading activity fell at its fastest pace in nearly three months, and global equities saw net selling at roughly twice the standard deviation of the past year's flows.
• IT-sector gross position reductions were the largest in two months, with semiconductors suffering the biggest dollar losses within tech; the tech sector's net allocation still stands at 23.5% of the global prime book, in the 90th percentile over the past five years, while net leverage (the degree to which long positions exceed short positions) fell to 48.6%, its lowest point of the year, indicating funds turned more cautious.
• Tech was the worst-performing sector in the MSCI World Index over the period, and the Nasdaq 100 fell 5.5% over the past week, its worst weekly performance since April 2025; Goldman attributed the moves to a broader unwind of AI-related investment flows globally.

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