Hedge funds staged a near-record sell-off of tech stocks

In the first week of November, hedge funds sold off shares of technology companies around the world at one of the fastest rates on record, according to data from Goldman Sachs’ institutional client division. Bloomberg reported this.

The technology sector led in net sales both globally and in the U.S. alone, according to Goldman Sachs statistics as of November 6. In percentage terms, the volume of sales has nearly reached a record high since 2016, when the bank began tracking this data. In addition, net sales of individual stocks reached a four-month high. Apart from the technology sector, hedge funds were selling off shares of U.S. industrial companies at the fastest pace since April 2020.

The reduction in risk positions affected the funds’ performance metrics. Total leverage, which consists of long and short positions, fell by 8.7 percentage points over the week to 207.5%—the sharpest drop since March 2020, according to Bloomberg. Net leverage—calculated by subtracting short positions from long positions—fell by 3.7% to 43.3%, a level not seen since U.S. President Donald Trump announced tariffs in April 2025.

Investors rushed to reduce their exposure following the U.S. midterm elections, which raised doubts about the future pace of data center construction and the associated demand for semiconductors and other infrastructure. Market participants have begun to pay increasing attention to how much new capacity will actually be built in the coming years, the agency notes.

On November 5, the day of the market crash—which set a record for trading volume—Wall Street speculated that the cause was liquidations by hedge funds, according to Barron's. One of the driving forces behind the sell-off may have been so-called volatility control funds, which take long and short positions depending on the level of volatility, Bloomberg also noted. According to Barclays, these funds were expected to rebalance their portfolios on November 5 and sell approximately $135 billion worth of U.S. stock futures over the next 24 to 48 hours. These were the largest adjustments since December 2018, Bloomberg reported.

However, by the end of last week, there were signs of stabilization, according to Bloomberg. According to data from Goldman Sachs’ trading division, hedge funds bought more shares than they sold over the course of the week. The bulk of the buying took place on Friday and was primarily related to the closing of positions in stock indices and ETFs.

This article was AI-translated and verified by a human editor