Goldman Sachs: hedge funds are dumping AI stocks at a rapid clip

Hedge funds have been heading for the exits on AI stocks. According to Goldman Sachs prime brokerage data, funds sold AI-linked stocks at the second fastest pace in a year, and their net leverage dropped at the same time. What Goldman is seeing Goldman’s data from July 2026 showed hedge funds had been net sellers of US tech. Their collective exposure shrank by approximately 10% in market value since early June. Goldman described that as the most substantial retreat it had recorded in over a decade. Funds were net sellers in six of the eight weeks leading up to mid-July 2026. The pain was spread across most of the tech complex. Selling concentrated in hardware, storage and peripherals, IT services, semiconductors and software. A rough summer for the smart money July 2026 marked the worst monthly underperformance for hedge funds relative to the S&P 500 in over 20 years, a slump linked to their AI positions. Goldman strategists acknowledged significant length reduction within hedge fund portfolios. The bank also flagged early signs of capitulation in some positions. Still, Goldman framed the retreat as a tactical adjustment rather than a wholesale exit from tech. Funds were trimmi...