top of page
  • Writer's pictureRealFacts Editorial Team

Tech Exodus: Hedge Funds Shift Focus to Financials


Graph

Hedge funds have recently changed their investment strategies away from technology stocks, especially in the semiconductor and chip equipment sectors, after seeing big gains earlier this year. Data from Goldman Sachs’ prime brokerage shows that professional traders have been steadily reducing their investments in tech stocks over the past few weeks, with semiconductor stocks particularly seeing selling pressure. This shift has led to a decrease in the overall amount of money invested in chip stocks, dropping from a five-year high of 5.8% in early June to 4.3% now.


The move away from tech stocks by hedge funds happened at the same time as a broader decline in the tech sector, shown by Nvidia’s significant decrease in stock price. Nvidia, a major player in artificial intelligence technologies, recently saw a notable drop in its stock price, contributing to the overall weakness in the sector. This decline came after Nvidia briefly became the most valuable U.S. company, only to see its stock price fall by 6.7% in a single day, ending its eight-week streak of gains.


In contrast, hedge funds have been increasingly interested in financial stocks, marking the second straight week of significant investment in the sector. Goldman Sachs reports that this shift into financials has been the fastest since December, showing a departure from broader market trends where the S&P financial sector has gained 10.5% year-to-date, though less than the broader S&P 500’s increase of over 14% during the same period.

Comments


bottom of page