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Hedge funds dump tech shares in one of their quickest selloffs on record

Last week, hedge funds unloaded worldwide tech shares in one of the quickest selloffs ever recorded. Strategists at Citi trimmed their view on US equities and raised Europe, while Asian markets bounced back but investor mood remains shaky.

Illustration: A vast data center hall of identical server racks under a clear sky, with a few racks tipping over like dominoes while a small crane tries to hold the rest upright.
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Last week saw hedge funds offload tech shares around the world in one of the quickest selloffs on record. A hedge fund is a private investment pool that trades actively on behalf of wealthy and institutional clients.

The selling followed worries that political opposition could derail the buildout of data centers, the large computer facilities that power artificial intelligence. Those worries set off an aggressive reassessment of the AI trade, the market bet that AI will drive big profits for technology companies.

Illustration: A half-built data center site seen from above at dusk, with steel frames, cranes, cooling units and a fence, and a few anonymous figures standing at the gate.
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Strategists at Citi responded by cutting their view on US stocks and upgrading Europe after the turmoil. The move shows how the AI turmoil is changing how some large investors weigh regions.

Nasdaq Composite25,189.46down −5.63%over 1 month
26,713.0324,315.0014 Oct13 Nov

Prices can be delayed by 15 minutes or more. Past moves say nothing about future ones.

In Asia, equities mostly rebounded after the rout, though sentiment remained fragile. Global stocks were described as steady after the AI sell-off, and Nvidia was at center stage as tech shares recovered after the midterm elections.

In London, the FTSE 100 edged up, and the Nvidia turmoil did not spill into US futures. Futures are contracts that show where traders expect stocks to open.

The sell-off also raised risks for SoftBank's large AI bet. The episode exposed how much market risk now rides on AI investment and on political uncertainty.

GuideFear and Greed Index today: how fearful or greedy US stock investors are

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