Hedge funds suffer losses as tech selloff deepens on AI spending doubts
Global hedge funds posted their worst day since the COVID rout as tech stocks slid, according to Goldman Sachs data reported by Reuters.
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what happened
Global hedge funds were hit again this week by a tech selloff, posting their worst day since the COVID-era market rout, according to Reuters, which cites Goldman Sachs. All three major strategies the bank tracks lost more than 1% on October 22, with fundamental long-short, systematic and multi-strategy funds all affected.
The selloff was partly triggered by Meta, which said it would issue a new class of shares to raise money for AI model construction. Meta Platforms fell 7% on Thursday, Nvidia dropped 4%, and the Nasdaq Composite lost 2.6%. Asian stocks also came under pressure from higher oil prices and worries about heavy AI spending.
why it matters
Investors cutting exposure to crowded AI-linked trades forced hedge funds to reduce risk, which can amplify volatility in technology stocks. Goldman Sachs estimates fundamental long-short funds are down 3.8% in October but still up 8.8% year to date. Tech-focused and Asia-focused funds were among the biggest losers, down roughly 10% and 9% respectively through October 22.
market impact
Tech stocks and Nasdaq: forced hedge fund selling and AI spending doubts pressure shares
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instruments
sources
- Hedge fund returns worsen this week as tech selloff deepens — Reuters, 23 October 2026 at 08:57 UTC
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