US hedge funds race to dump semiconductor shares for 4th consecutive week

Moves to exit semiconductor shares on US markets have continued to mount. Semiconductor and hardware companies and other information technology sectors topped the list of assets that US hedge funds net sold for four consecutive weeks, Reuters reported Monday (local time).

Goldman Sachs said in a client note that US hedge funds net sold technology shares for four straight weeks through last week. Tech stocks — semiconductor-related shares in particular — had driven the US market's gains this year, but attempts to rotate out of semiconductors have persisted since last month.

Contributing to the trend are growing doubts about whether AI companies and hyperscalers — firms that operate large-scale data centers — can translate their massive infrastructure investment into actual sales growth that sustains the market's expansion. Profit-taking at peak levels added further selling pressure, pushing the Philadelphia Semiconductor Index down 4.2 percent last week. The index tracks the share prices of 30 semiconductor-related companies.

Hedge funds also net sold shares in industrial and consumer discretionary sectors, while shifting into index funds and exchange-traded fund (ETF) products, the report showed.