Goldman Sachs reported that hedge funds have increased their short positions in US stocks to record levels, with the information technology sector being a major area of selling pressure.

Concerns about artificial intelligence potentially disrupting business models continue to ferment in the market, leading hedge funds to increase short positions in American stocks. Goldman Sachs' prime brokerage team pointed out in a client report that last week, the nominal size of short positions in individual stocks reached the highest level the bank has seen since 2016. The team, including Vincent Lin, cited fund flow data from January 30 to February 5, stating that the volume of short trades was twice that of long trades. Last week, the market value of 164 stocks in the software, financial services, and asset management sectors evaporated by $611 billion. Overall, hedge funds have been net sellers of U.S. stocks for the fourth consecutive week, with selling reaching the highest level since the so-called "Liberation Day" in early April. The Goldman Sachs team pointed out that the information technology sector was the most heavily sold area, with the outflow of funds ranking second in the past five years. Software stocks were the main part of the fund outflow, accounting for about 75% of their net selling amount. The total net holdings of software stocks by funds fell to 2.6%, and the long-short ratio fell to 1.3 - both reaching record lows. The semiconductor and semiconductor equipment sectors, along with the IT services sector, were among the few tech-related areas that saw net buying that week. Semiconductor stock indicators rose last week, exacerbating the divergence between chip stocks and software stocks. This divergence has been widening in recent months as investors punish industries they fear may be disrupted by artificial intelligence.