Hedge Funds Rapidly Scale Back Tech Stocks Amid Tariff Concerns
Hedge funds have rapidly divested from tech stocks amid tariff deadline fears, marking the fastest sell-off in six months and targeting key players like Nvidia, AMD, and Tesla.
Published on April 1, 2025
Last week, hedge funds sold tech stocks at the fastest pace in six months and the highest levels in five years, driven by growing worries about the April 2 tariff deadline set by U.S. President Donald Trump. According to Goldman Sachs, these disposals come amid fears of retaliatory trade actions, government spending cuts, and a possible recession, with the most significant sales focusing on tech stocks, particularly those tied to artificial intelligence hardware.
Reports from Reuters on March 31 and March 27 further highlighted that hedge funds have been shorting key tech stocks such as Nvidia, Advanced Micro Devices, and Tesla. Despite massive sell-offs, strong retail purchases have been noted as a counterbalance, contributing to a nuanced market dynamic. This adjustment is seen as part of broader efforts by hedge funds to lower their tech exposure, which is now at its lowest in five years, while also diversifying their investments into less volatile sectors.