During the five trading days through October 15, hedge funds slashed their technology holdings by the largest margin since Goldman Sachs began tracking the data in 2016, according to the bank's prime brokerage unit.
At the same time, a report from Goldman Sachs' global banking and markets division showed that overall trading activity declined at the fastest rate in nearly three months.
The selling by hedge funds came as global technology stocks suffered a sharp downturn. As the AI-themed trade lost momentum worldwide, the Nasdaq 100 fell 5.5% last week, marking its biggest drop since April 2025.
Over the five trading sessions covered by Goldman's data, tech stocks were the worst-performing sector in the MSCI World Index.
Goldman's data showed that global equity net selling flows reached two standard deviations relative to flows over the past year. Net selling in the information technology sector was the most pronounced by a wide margin, with semiconductors seeing the largest selling amount in dollar terms.
Still, hedge funds continue to hold substantial technology positions. According to the report, the tech sector accounts for 23.5% of global prime holdings, and net exposure to the sector remains at the 90th percentile of the past five years.
But hedge funds have grown more cautious. Net leverage dropped to a one-year low of 48.6%, a measure of how much long positions exceed short positions.
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