Hedge funds are bailing on tech — fast. In the biggest exodus in six months, institutional investors are cutting exposure to global technology stocks, with semiconductors hit hardest, just days before Trump’s April 2 “Liberation Day” tariffs kick in.
A new Goldman Sachs report shows that hedge fund exposure to tech is now at its lowest in five years, driven by fears over macro shocks, AI overvaluation, and trade policy risk.
Semis Get Sliced First
The most aggressive selling is centered on semiconductors, especially Nvidia (NVDA) and AMD, according to data from both Goldman and Morgan Stanley.
Hedge funds “fled tech stocks before tariffs take hold,” said Goldman.
Short positions in Nvidia, Tesla, and AMD are spiking, Morgan Stanley noted last week.
Trump’s sweeping tariff campaign — set to start April 2 with reciprocal tariffs on “all countries” — is fueling uncertainty across global supply chains. Chipmakers, which rely on international exports and pricing stability, are suddenly in the firing line.
NVDA Under Pressure — But Still Resilient
Nvidia (NVDA) opened at $105.11 today and is trading around $104.46, down from recent highs but still well above its 52-week low of $75.60. With a $2.5T+ market cap, a forward P/E of 25.35, and a mean analyst target of $171, NVDA remains a long-term bull pick despite short-term selling.
“The sector still holds promising prospects backed by strong fundamentals,” Goldman said, cautioning against a full-blown panic.
What’s Really Driving the Exit
- Tariff fears: April 2 is now a market risk event.
- AI skepticism: Valuations are rich, returns uncertain.
- Stagflation whispers: Slowing growth + sticky inflation = hedging behavior.
Despite the pullback, analysts see the current move as tactical, not structural. The longer-term thesis for semiconductors — especially AI hardware — remains intact. But for now, the hedge funds are moving to the sidelines.
Wall Street’s biggest players are lightening their tech load ahead of Trump’s tariff wave — and semiconductors are taking the hit. Volatility will rule the week, but under the surface, the AI chip race isn’t over — just paused.
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