Goldman’s prime brokerage data caught hedge funds slashing chip stocks at a pace not seen in over a decade, and the question now is whether that selling cleared the air or set up a longer retreat for one of the…
Hedge funds sold technology stocks at the fastest rate in at least a decade during the week through October 15, 2026. That comes from prime brokerage data from Goldman Sachs (NYSE:GS | GS Price Prediction) reported on October 19, and semiconductors took the largest dollar hit.
Chip stocks bounced on Monday, October 19. NVIDIA (NASDAQ:NVDA) rose 1.38% to finish at $217.09, and the iShares Semiconductor ETF (NASDAQ:SOXX) gained 1.73% to $501.93.
For holders of either one, what matters is whether the selling cleared out weaker holders or started a longer retreat. The data covers only Goldman’s prime book, meaning the hedge funds that use the bank for financing and trade execution, so it is a large sample of the industry and still only a sample.
Funds Sold Shares They Already Owned
Goldman described the selling mainly as long liquidation. In other words, funds sold shares they already held and did not open many new short positions, which profit when a stock falls.
That matters because long liquidation stops once funds have cut what they wanted to trim, while a fresh bearish thesis can keep pushing prices down for weeks. It points to weaker confidence and a less firm view that chips are overpriced.
The selling was broad. Information technology had its largest cut in gross positions in two months, and global equities were net sold at two standard deviations against the past year’s flows.
The Nasdaq 100 dropped 5.5% for the week. That was its worst week since April 2025.
Leverage Fell, but Tech Is Still Crowded
Net leverage measures how far funds’ long positions outweigh their shorts, and it fell to 48.6%, a one-year low. Funds now carry less risk, giving them room to buy later but also meaning fewer buyers would step in if selling resumes.
Tech still made up 23.5% of Goldman’s global prime book after the selling. That share sits in the 90th percentile of the past five years, so funds still hold a lot of tech by historical standards and could sell more.
The stocks that fell the most bounced back the most on October 19. Marvell Technology (NASDAQ:MRVL) rose 4.06% after a 10.82% one-week drop. Lam Research (NASDAQ:LRCX) gained 3.13% after falling 12.07%.
Nvidia fell less than its peers during the selloff. It fell 4.08% over the week, compared with 7.88% for SOXX.
Nvidia is up 16.67% year to date, while SOXX has gained 66.96%, so the broader chip group has far more recent profit that funds could still lock in.
Why Nvidia’s Steadier Week Could Matter if Selling Resumes
The selling looks like profit-taking by funds that still own plenty of tech, and Nvidia was the steadiest large chip stock through it. Its smaller gain in 2026 also means funds have less profit to take in Nvidia than in the wider chip group.
SOXX gives you broader chip exposure. Its sharper weekly drop and much larger gain this year make it more vulnerable if crowded tech positions keep unwinding, which is the whole question our free bubble survivor’s handbook is built around, so the fund carries more downside risk than Nvidia in that scenario.
If Nvidia closes back below $214.13, the level it rebounded from on October 19, the selling has probably not run its course. A move back toward $226.32, where it closed on October 12, would mean the funds have finished selling.
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