Hedge funds dump US tech stocks at fastest pace since 2016, Goldman says

Goldman Sachs said hedge funds dumped U.S. information technology stocks in the week ending June 25 at the fastest pace in its data set, a run that went back to 2016 and even exceeded the selling seen in the August 2024 correction.

The move pushed Magnificent 7 exposure in hedge fund portfolios down to 14.5%, near the lowest level in three years and 7 percentage points below where it stood at the start of 2026. Goldman said the six-month drop was the steepest since the 2022 bear market, a sharp reset for a trade that has dominated index returns and client positioning across U.S. markets.

For Goldman’s equities and prime brokerage teams, the signal is bigger than one bad week. If hedge funds are no longer leaning on Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta and Tesla as the default source of momentum, then the firm’s desks that live off concentrated tech flow have to adjust to a market where capital is moving around the book more often and crowding is less predictable. That changes which conversations matter in the morning: not just how far the Nasdaq 100 can run, but where clients want to redeploy risk next.

The selling also looks less like a clean exit from AI than a bout of de-risking. Reuters had previously reported that hedge funds were trimming technology and buying consumer staples in July 2025, and Goldman said that episode reflected funds exiting long bets rather than building meaningful short positions. In May 2026, Goldman’s own commentary said hedge funds were taking profits on semiconductor and equipment makers to manage portfolio risk even as technology stocks kept reaching record highs.

That distinction matters for Goldman’s tech coverage and prime services bankers. A pullback driven by profit-taking and rebalancing can fade as quickly as it starts, especially after a crowded run-up. But Goldman’s comparison to 2016, and to the August 2024 correction when the Nasdaq 100 fell more than 10% into correction territory, raises the harder question: whether this is just another de-risking wave or the beginning of a broader rotation away from the megacap names that have supplied so much of the trade flow.

Separate JPMorgan data cited by Reuters showed hedge funds selling out of the biggest U.S. tech stocks ahead of SpaceX’s June 13 IPO, while the Roundhill Magnificent Seven ETF had fallen more than 2.4% since June 5. For Goldman, that kind of synchronized pullback across the most crowded tech names can mean less easy beta for clients and a more selective market for the bankers who cover it.