Goldman Sachs: Hedge funds are reducing tech stocks at the fastest pace in at least a decade

Goldman Sachs: Hedge Funds Reduce Tech Stocks at Fastest Pace in at Least a DecadeData from Goldman Sachs' prime brokerage division indicates that hedge funds are reducing tech stock holdings at the fastest pace in at least ten years. In the five trading days ending October 15, hedge funds cut their tech stock positions by the largest margin since Goldman Sachs began tracking the data in 2016. Meanwhile, a report from Goldman Sachs' Global Banking & Markets division shows that the rate of decline in total trading activity has been the fastest in nearly three months. Hedge funds engaged in sell-offs as global tech stocks plunged.As AI-themed trades receded globally, the Nasdaq 100 Index fell 5.5% last week, marking its biggest drop since April 2025. Over the five trading days covered by Goldman Sachs' data, tech stocks were the worst-performing sector in the MSCI Global Index. Data from Goldman Sachs shows that the net outflow of global equities reached two standard deviations above the past year's flows. The information technology sector led by a wide margin in net selling, with the most notable net outflows, while the semiconductor sector experienced the largest amount sold. However, hedge funds still hold substantial tech positions. The report states that the tech sector accounts for 23.5% of global prime positions, with net allocation to the sector in the 90th percentile over the past five years. Nevertheless, hedge funds have become more cautious. Net leverage has dropped to a one-year low of 48.6%, a metric that measures the extent to which long positions exceed short positions.