Hedge Funds Cut Exposure to Chipmakers for Fourth Consecutive Week Amid AI Sector Decline

Hedge Funds Continue to Unload Tech Hardware Stocks

U.S. hedge funds sold tech hardware stocks for a fourth consecutive week, according to a client note from Goldman Sachs on Friday. This trend aligns with a recent decline in global chip shares and comes just before many of these companies will report earnings.

Tech shares, particularly semiconductors, have driven the broader equity market higher this year. However, tech stocks have been experiencing significant fluctuations due to a combination of profit-taking and concerns about the high levels of spending on artificial intelligence (AI) and when the companies behind those outlays might see returns. The SOX index, which tracks the performance of semiconductor stocks, declined by 4.2% in the week ending July 3.

According to the Goldman Sachs note, hedge funds exhibited a net selling bias in various stock sectors during the week. The key findings include: