Goldman Sachs data shows hedge funds reversed all AI stock buying since 2025 in five days, alongside $20 billion in technology stock sales.
Victoria Hale
… min read
Hedge funds have reversed all their net buying of artificial intelligence (AI) stocks since the beginning of 2025 in just five trading sessions, according to data from Goldman Sachs. The rapid shift in positioning highlights a significant retreat from technology shares, with hedge funds also selling approximately $20 billion worth of technology stocks over a two-week period.
Goldman Sachs’ prime brokerage desk recorded five consecutive sessions of net selling in global AI stocks by hedge fund clients. The selling was sufficient to erase all the net purchases accumulated since the start of 2025, marking a sharp reversal in institutional positioning toward AI-related equities.
Hedge Funds Accelerate Technology Stock Selling
The scale of the selling extended beyond AI-focused investments. Hedge funds disposed of approximately $20 billion in technology stocks over two weeks, according to the figures cited by Coin Bureau. The data suggests that institutional investors were reducing existing positions rather than simply adjusting their exposure through new short bets.
Goldman’s figures indicated that selling of stocks already held by hedge funds occurred at 3.5 times the pace of new bearish positions against AI stocks. This distinction is important because it suggests that the reduction in exposure was driven primarily by investors liquidating existing holdings, rather than relying mainly on strategies designed to profit from falling share prices.
The consecutive selling sessions also indicate that the reversal was concentrated within a relatively short period. By eliminating all accumulated net AI stock purchases since the beginning of 2025 in just five sessions, hedge funds effectively erased their previous buying activity in the sector.
Hedge Fund Favorite Stocks Record Sharp Decline
The shift in positioning coincided with a substantial decline in a basket of stocks favored by hedge funds. According to Goldman Sachs data, the bank’s basket of hedge funds’ most popular stocks fell 4.2% on October 22.
That daily decline represented the basket’s worst performance since 2011, underscoring the scale of the pressure affecting stocks heavily represented in hedge fund portfolios. The figure provides another indication of the extent to which institutional investment positions were exposed to the markets downturn.
Broad Equity Exposure Sees Largest Reduction Since 2016
The reduction in risk was not limited to artificial intelligence and technology shares. Across the broader equity market, hedge funds cut approximately 7.8% of their total stock exposure, according to Morgan Stanley data cited by Steno Research.
The 7.8% reduction was the largest recorded in Morgan Stanley’s data series, which dates back to 2016. This places the latest adjustment among the most significant contractions in hedge fund equity exposure captured by the dataset.
Taken together, the figures from Goldman Sachs and Morgan Stanley point to a broad retreat from equity positions among hedge funds. The reversal in AI stock buying, approximately $20 billion in technology stock sales over two weeks, and the 7.8% reduction in overall equity exposure illustrate the scale of the reported repositioning.
Goldman’s data specifically shows that hedge funds erased all their net AI stock purchases since the start of 2025 in five consecutive trading sessions, while the October 22 decline of 4.2% marked the worst daily performance for the bank’s hedge fund favorite-stock basket since 2011.
Technology & Blockchain Writer
Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.
She prioritises clarity and accuracy when explaining technical developments to a general audience.
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