Al Arabiya Net _ Hedge funds trimmed their positions in tech stocks at the fastest pace in at least a decade, according to data from “Goldman Sachs”, amid a broad sell-off sweeping the sector globally, alongside waning momentum linked to artificial intelligence investments.
Data showed that hedge funds reduced their exposure to technology stocks during the five trading sessions ending October 15, marking the largest percentage drop since data tracking began in 2016, coinciding with a 5.5% decline in the Nasdaq 100 index last week, recording its worst weekly performance since April 2025.
Tech stocks still account for approximately 23.5% of hedge funds' net positions despite heavy selling
Despite heavy selling, tech stocks still account for approximately 23.5% of hedge funds' net positions, while their net leverage fell to 48.6%, the lowest level in a year, reflecting growing caution regarding market prospects.
Global markets expert Ahmed Shuraim stated that U.S. stock markets are facing mounting pressures driven by concerns related to the artificial intelligence sector, rising financing costs, and increasing credit risk indicators among certain companies.
In an interview with “Al Arabiya Business”, Shuraim explained that technology company stocks are negatively impacted by any news concerning the postponement of data center projects or a slowdown in growth plans, pointing to the rise in the cost of credit default swaps, known as “CDS”, which may provide early indicators of growing risks in the markets.
He added that the rise in the volatility index “VIX” reflects heightened investor anxiety, though it remains at levels that do not warrant exaggerating concerns over current sell-offs.
AI companies' bond issuances approach $300 billion in 2026
Shuraim noted that artificial intelligence companies are heading towards issuing large quantities of bonds to finance their expansions, explaining that their issuances this year are estimated at between $258 billion and $300 billion, a volume approaching that of 10-year and 20-year U.S. Treasury bond issuances.
He emphasized that concerns regarding financing sustainability will persist unless companies achieve significant earnings growth or a new technological breakthrough that enhances their ability to cover expansion costs.
