Hedge funds unloaded more global AI stocks over the past 20 trading days than in any comparable period on record, extending their selling streak to six consecutive weeks. The 20 day liquidation ran 3 standard deviations below the historical average, surpassing the pace seen during both the Liberation Day selloff and the 2022 bear market, while last week’s leverage reduction was the largest since the March 2020 crash and the fourth fastest drop in overall positioning since that period.

In October alone, hedge funds cut net leverage by 4.2 percentage points to 73.4% and sold about $20 billion in technology shares over a two week span, including dumping Magnificent Seven stocks in four of five sessions, Goldman Sachs prime brokerage data shows. Fundamental long/short funds fell 3.5% for the month and systematic strategies lost 3.6%, the first time in Goldman’s records that both stock pickers and quants lost more than 3% in the same month.

The retreat pushed hedge funds underweight the broader AI trade for the first time since early 2023 as active de-grossing since June topped 8% of total gross equity exposure, the largest sustained reduction in Morgan Stanley prime brokerage data going back to 2016. Even after the six week selloff, hedge fund exposure to the Magnificent Seven as a share of total US equity holdings remains near its highest level on record.