Hedge Funds Slash Magnificent 7 Exposure as AI Trade Fades
Hedge fund gross and net exposure to the Magnificent 7 stocks has dropped to near three-year lows, amid a rotation out of crowded AI trades and underperformance relative to the broader market.
Hedge funds have significantly reduced their exposure to the Magnificent 7 group of megacap tech stocks, with gross and net positions falling to levels not seen in nearly three years. The move comes as investors rotate away from crowded artificial intelligence trades that had driven the group's outperformance.
The Magnificent 7 has recently underperformed the broader market, prompting fund managers to trim their holdings. The shift marks a notable change in sentiment toward the AI-driven rally that had dominated much of 2023 and early 2024.
Source: First Squawk