Hedge funds extend chip selloff for fourth week as AI spending doubts persist

U.S. hedge funds have sold semiconductor and tech hardware stocks for a fourth consecutive week, according to a client note from Goldman Sachs.

The persistent outflows align with a broader decline in global chip shares and highlight deepening caution among institutional investors ahead of a busy earnings season for major semiconductor names.

The selling pressure reflects a shift in market sentiment regarding the sustainability of artificial intelligence spending.

While the AI infrastructure build-out has driven significant growth for chipmakers, investors are increasingly scrutinizing whether current revenue trajectories can justify elevated valuations.

This skepticism has contributed to renewed volatility in the sector, with the technology-heavy Nasdaq facing headwinds as capital rotates away from high-multiple growth stocks.

The trend coincides with a broader pullback in U.S. equities, where semiconductor shares have been a primary driver of recent losses.