Hedge funds cut tech exposure sharply

Goldman Sachs says hedge funds used last week’s U.S. stock rally to cut risk, with information technology seeing its biggest weekly de-grossing since July 2024. (finance.yahoo.com) The Goldman prime brokerage desk said U.S. long-short gross leverage fell 4.6 percentage points last week, the biggest notional de-grossing in seven months. Nine of 11 sectors were net sold. (finance.yahoo.com) Within tech, Goldman said the move was driven by long sales outpacing short covers by 1.9 to 1. The bank called it the third-largest reduction in overall tech positioning in the last five years. (finance.yahoo.com) That still left hedge funds heavily exposed to the sector. Goldman said tech accounted for 20.6% of total U.S. overall market value in hedge fund books, in the 92nd percentile of the past year and the 98th percentile of the past five years. (finance.yahoo.com) The selling came into a market that had just surged back to records. Reuters reported on April 24 that the S&P 500 faced a pivotal week after climbing more than 13% from late March, with earnings from major technology companies and a Federal Reserve meeting ahead. (money.usnews.com) The backdrop earlier in April was much rougher for hedge funds. Reuters reported on April 1 that global hedge funds suffered their worst monthly drawdown since January 2022 as volatility tied to the Iran war hit stocks. (money.usnews.com) Tech had already been a pressure point in 2026, especially in software. CNBC reported on February 4 that short sellers had made $24 billion in software stocks this year as the sector’s market value fell by about $1 trillion. (cnbc.com) So the latest move looks less like an exit from tech than a trim after a fast rebound. Hedge funds sold into strength, but Goldman’s data shows the sector still sits near the top of its recent positioning range. (finance.yahoo.com)