Hedge Funds Are Bailing on Tech Stocks at a Record Pace — Here’s What Goldman Found

TLDR

• Hedge funds sold U.S. tech stocks in 6 of the past 8 weeks, per Goldman Sachs
• Total tech exposure cut by 10% — the steepest decline in the data series history
• Semiconductors took the biggest hit, absorbing over half of the selling
• Hardware, storage, IT services, and software all saw net outflows
• Goldman notes early signs of investor capitulation emerging

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Hedge funds have cut their exposure to U.S. technology stocks by 10% over the past two months, the steepest pullback on record according to Goldman Sachs’ Prime Services desk.

The bank said tech stocks were sold in six of the last eight weeks. The scale of the retreat is the largest Goldman has recorded since it began tracking the data over a decade ago.

Semiconductors took the hardest hit, absorbing more than half of the total selling. Memory manufacturers and AI infrastructure companies also saw heavy outflows as investors pulled back from the sector.

Goldman said the technology sector was both the worst-performing and most heavily sold U.S. sector last week. Hedge funds cut long positions and added short exposure at the same time.

Where the Selling Was Concentrated

Hardware, storage, and peripherals saw the largest outflows. IT services, software, and chipmakers also experienced net selling across the period.

Goldman strategists said the sustained weakness points to meaningful position unwinding among tech-focused investors. The bank also noted early signs of capitulation starting to emerge.

The tech sector has fallen around 10% since early June. Concerns over stretched AI valuations have pushed some investors to rotate into other areas of the market.

What Goldman Said

Goldman’s desk wrote that the persistence and size of the selling since early June points to investors cutting tech exposure sharply, particularly across semiconductors, memory, and AI infrastructure plays.

The bank said the trend reflects a broader reassessment of AI-related positions after a period of strong gains in the sector.

Despite the selling, Goldman strategists noted the long-term fundamentals of the AI infrastructure space remain intact. The current pullback appears to be more about positioning and valuation than a change in the underlying business outlook.

This is the largest recorded sector retreat in Goldman’s Prime Services data history. The speed and scale of the move has drawn attention across markets.

Tech stocks have now given back a large portion of their earlier 2026 gains. Whether the selling continues will likely depend on upcoming earnings results and any shifts in AI spending guidance from major technology companies.