🚨 Hedge funds are pulling money out of the stock market at the fastest pace ever recorded.
Morgan Stanley's prime brokerage data shows they have cut their total stock positions by more than 8% from the recent peak. That's the biggest cut since the data began in 2016, bigger than both the 2020 COVID crash and the 2021 GameStop squeeze.
Most of it has hit AI stocks.
Goldman Sachs says hedge funds sold AI stocks for 5 straight days, from Oct 8 to Oct 14. That wiped out all the AI buying they had done since the start of 2025.
They sold the stocks they owned about 3.5x faster than they added new bets against them. So most of this is funds leaving the trade, not shorting it.
Morgan Stanley's AI stock basket fell 18% in October, while the average US stock rose about 2%.
Memory stocks like Samsung, SK Hynix, Micron and SanDisk lost more than $700 billion in seven trading days. SK Hynix had its worst week since 2008.
Is this the first sign the AI trade is breaking?
Morgan Stanley's prime brokerage data shows they have cut their total stock positions by more than 8% from the recent peak. That's the biggest cut since the data began in 2016, bigger than both the 2020 COVID crash and the 2021 GameStop squeeze.
Most of it has hit AI stocks.
Goldman Sachs says hedge funds sold AI stocks for 5 straight days, from Oct 8 to Oct 14. That wiped out all the AI buying they had done since the start of 2025.
They sold the stocks they owned about 3.5x faster than they added new bets against them. So most of this is funds leaving the trade, not shorting it.
Morgan Stanley's AI stock basket fell 18% in October, while the average US stock rose about 2%.
Memory stocks like Samsung, SK Hynix, Micron and SanDisk lost more than $700 billion in seven trading days. SK Hynix had its worst week since 2008.
Is this the first sign the AI trade is breaking?
