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Hedge funds are rotating out of tech stocks, especially winning chipmakers, after strong gains in the first half, according to data from Goldman Sachs’ prime brokerage . Technology stocks saw the most net selling from the professional trading cohort last week, who have been rotating out of the sector for four of the past five weeks, according to Goldman. Semiconductor and chip equipment shares experienced the most significant selling during the period, Goldman said. The Wall Street investment bank said chip stocks now make up 4.3% of overall net exposure on its prime book, down from a five-year high of 5.8% at the start of June. Hedge funds’ sale of tech stocks coincided with a retreat in the sector, led by Nvidia , the biggest beneficiary from the artificial intelligence boom so far. The Jensen Huang-led chip giant is in the middle of a big pullback after briefly dethroning Microsoft as the most valuable company in the U.S. last week. The stock fell about 6.7% Monday, adding to its 4% decline last week that snapped an eight-week winning streak. While hedge funds dumped tech names, they were rotating into financial stocks for a second straight week and at the fastest pace since December, Goldman said. The S & P financial sector is up 10.5% this year, underperforming the S & P 500, which has gained more than 14% year to date.
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