Hedge funds have net-sold U.S. technology stocks for four straight weeks, with semiconductor and hardware names at the center of the unwind, according to Goldman Sachs prime brokerage data cited by Reuters. The AI signal is cautious, not abandonment: sophisticated traders appear to be trimming crowded chip winners after a major run, even as semiconductor exposure remains historically elevated.
The Selling: Four Straight Weeks Out of Tech
According to Goldman Sachs prime brokerage data circulated the week ending July 3, hedge funds net-sold U.S. information technology for a fourth consecutive week, with semiconductors leading the outflows. The writing was on the wall. The Philadelphia Semiconductor Index (SOX) fell 4.2% over that stretch, and info tech was the single most net-sold sector across the book. Positioning flows moved into commercial services, consumer staples, real estate, and energy, alongside broad index and ETF products, per Reuters reporting on the Goldman note. On the surface, that pattern looks like leadership giving up.
But Not Everyone Is Selling
The counterweight comes from Whale Rock Capital, the roughly $19 billion tech-focused hedge fund that Bloomberg reports gained 72.5% year-to-date through mid-year, with its long-only fund up 82%. The returns did not come from NVIDIA. They came from a concentrated bet on the layer beneath it: SanDisk (NASDAQ:SNDK | SNDK Price Prediction), up more than 850% in H1 2026; SK Hynix, up more than 300% (foreign-listed currently); and printed-circuit-board maker TTM Technologies (NASDAQ:TTMI), up roughly 170% in H1 2026, per Bloomberg data. Whale Rock also holds a stake in private AI lab Anthropic at a reported valuation near $965 billion.
Verified year-to-date price moves through July 7 line up with that thesis. TTM Technologies is up 108.81%, Micron Technology (NASDAQ:MU) is up 229.2%, and Western Digital (NASDAQ:WDC) is up 211.7%, versus the S&P 500 at 9.25%.
Rotation, Not Exit
Despite what it seems, the two threads are not in conflict with each other. Broad hedge-fund selling of mega-cap semiconductors reads as profit-taking after a historic run, while Whale Rock’s performance is precisely why there is profit to ring. The smart money is rotating within the artificial intelligence trade, toward memory (SanDisk, Micron), storage (Western Digital), components (TTM), and private AI, and away from the most-owned mega-cap leader.
Analyst books support the rotation: SanDisk carries 15 Buy and 3 Strong Buy ratings with a $1,930.50 target, Micron shows 31 Buy and 9 Strong Buy ratings with a $1,486 target, and Western Digital carries 18 Buy and 4 Strong Buy ratings with a $600.29 target.
NVIDIA as the Anchor
NVIDIA (NASDAQ:NVDA) illustrates the compressed leadership premium. Year-to-date through July 8, the stock is up 8.6%, trailing the S&P 500’s 9.2%, and is down nearly 7% over the past month, according to TradingView data. That price action sits against fundamentals that remain intact. Q1 FY27, reported May 20, delivered revenue of $81.615 billion, up 85.23% year over year, non-GAAP EPS of $1.87 versus $1.7738 consensus, and Q2 guidance of $91.0 billion in revenue. CEO Jensen Huang described the moment as “the buildout of AI factories, the largest infrastructure expansion in human history.”
The disconnect between beat-and-raise fundamentals and range-bound, distribution-like share price action is the definition of a crowded position getting trimmed.
The Signal for Retail Investors
The rotation is a message about repositioning. AI capital expenditure remains the load-bearing wall of this market, but leadership at the top has narrowed and crowded. Hedge funds are moving where the incremental dollar of margin sits: memory, storage, and the physical infrastructure below the GPU layer. For context on where analysts see the next wave of AI beneficiaries, see 24/7 Wall St.’s Next Nvidia Playbook. The takeaway for retail is patience over chasing, diversification within the AI theme rather than out of it, and a clear-eyed read that the smart money is repositioning. The melt-up is changing hands.
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