Data from Goldman Sachs shows that hedge funds are aggressively selling tech stocks now, with June's net dollar selling of the sector the largest on record.
Hedge funds "have aggressively net sold TMT stocks in the past month, led by Semis & Semi Equip (reversing the YTD trend) – this month’s $ net selling in US TMT is tracking to be the largest on our record," Goldman strategists said in a recent research report.
The data further shows that hedge fund exposure to momentum stocks has decreased for the first time in six months.
"HFs’ Momentum exposure is poised to decrease for the first time in 6 months and now in the 72nd percentile on a 5-year lookback (vs. 91st percentile at the end of May)," the report states.
The report from Goldman follows the recent drawdown in AI highflyer NVIDIA (NASDAQ: NVDA). After briefly becoming the world's most valuable company, NVIDIA saw a 3-day drawdown of $430 billion in market cap before recovering some of those losses. NVIDIA now sits behind both Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) in market cap. Further, stocks like Broadcom (NASDAQ: AVGO) saw heavy selling after hitting a record high post-earnings in mid-June.
"After adding risk to their portfolio in all but one week so far this year, trading flows from recent sessions point to some risk unwinds, driven by long sales and to a lesser extent short covers," the report added.