Tech Stock Holdings' Market Value Decreases by 10% Over Two Months
Tech Investors Reduce Positions... Some Signs of Panic Selling

▲ AI semiconductor image. (Photo = Motion Elements)

[The Guru = Reporter Hong Sung-hwan] Hedge funds have sold off US tech stocks at a record-large scale over the past two months. This is interpreted as growing skepticism over the sustainability of the tech stock rally amid spreading concerns of an AI peak-out.

US investment bank Goldman Sachs stated on the 21st, "Hedge funds net-sold tech stocks in six out of the last eight weeks," adding, "During this period, the market value of their tech stock holdings fell by approximately 10%, marking the largest decline since we began tracking the data more than a decade ago."

It also analyzed, "Amid ongoing volatility and sharp sell-offs across related stocks such as semiconductors, memory, and AI infrastructure, the massive selling that has persisted since early June suggests that tech investors are reducing their positions," and "Some areas are even starting to show signs of panic selling."

Indeed, the S&P 500 Information Technology (IT) Index has fallen by about 10% since early June. As concerns grew that major tech companies might scale back their AI-related investment spending, investors moved their funds to other sectors, such as consumer goods.

Goldman Sachs explained, "The tech sector was the worst performer last week, recording the largest net selling among all sectors due to long position reductions and increased short selling," adding, "By sub-sector, the selling was strongest in tech hardware, storage and peripherals, and IT services, while semiconductors and software also recorded net selling but on a relatively smaller scale."

It further projected, "Due to the extreme volatility of popular AI infrastructure-related stocks, interest in other sectors has risen again," and "Given past trends, current market conditions, and the lack of positive catalysts, the AI infrastructure investment strategy is highly likely to continue facing challenges in the short term."