Hedge Funds Dump Tech Hardware Stocks as AI Investment Concerns Mount
The generative AI boom has prompted chip, server and memory manufacturers to increase capital spending, but markets are increasingly focused on investment payback periods and whether demand can be sustained. Goldman Sachs’ tracking of hedge fund positions suggests the concentrated selling of technology hardware stocks is an important sign that investors are reassessing the returns on AI investment and industry valuations.
In the latest reports as of July 20, 2026, Goldman Sachs said U.S. hedge funds had sold semiconductor and technology hardware stocks for four consecutive weeks. The report did not disclose the total value of the sales. The selloff subsequently spread to Asian markets, where shares of South Korea’s Samsung Electronics and SK hynix fell sharply, reflecting growing concerns about excessive AI investment and market volatility.
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The history behind this eventChip Rout Deepens AI Selloff, Batters SK Hynix and Samsung
SK Hynix and Samsung Electronics produce roughly two-thirds of the world’s memory chips and are central to the high-bandwidth memory supply chain powering AI servers. Their heavy weighting in South Korea’s Kospi makes the benchmark unusually sensitive to shifts in the AI trade. Volatility has also been amplified since regulators approved 16 single-stock leveraged exchange-traded funds tied to the two companies in late May.
The Kospi closed 10.84% lower at 6,023.66 on July 28, prompting the Korea Exchange to impose a 20-minute marketwide halt. SK Hynix sank 14.7% and Samsung Electronics lost 13.4%. An attempted rebound failed on July 29, when the benchmark fell about 7.5% intraday as SK Hynix and Samsung dropped nearly 13% and 8%, respectively. The renewed selling reflected concerns over AI infrastructure financing, rising Chinese competition and leverage-driven fund outflows.
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