TLDR
- Hedge funds sold info tech and semiconductor stocks for a fourth straight week, per Goldman Sachs
- The SOX semiconductor index dropped 4.2% in the week ending July 3
- Foxconn reported stronger-than-expected quarterly sales, boosting AI demand confidence
- Samsung Electronics is expected to post an 18-fold jump in profit year-on-year, due Tuesday
- Nasdaq 100 futures jumped 1% Monday as tech stocks began to recover
Hedge funds in the U.S. sold technology hardware and chip stocks for a fourth consecutive week, according to a client note from Goldman Sachs released Friday. The selling came just ahead of a major earnings season for many of these companies.
The SOX index, which tracks semiconductor stocks, fell 4.2% in the week ending July 3. The drop reflects growing unease among investors about the pace of AI spending and when those investments might start paying off.
Goldman Sachs said info tech — including semiconductors and hardware — was the most net sold U.S. stock sector for the fourth week running. Hedge funds also sold industrial and consumer discretionary shares during the same period.
Hedge funds had more sold stocks than bought for the third straight week. Most of the selling last week was in single U.S. stocks, rather than broader index products.
While selling tech, hedge funds moved into other areas. They bought commercial services, consumer staples, real estate, and energy stocks. They also bought index and ETF products, which tend to move with the broader market.
Tech Futures Bounce Back Monday
Despite the recent selling, U.S. stock futures rose on Monday. Nasdaq 100 futures climbed 1%, while S&P 500 futures added 0.4%. Dow Jones futures were little changed after the blue-chip index had a record-setting holiday-shortened week.
The bounce came after Foxconn, a key supplier to Nvidia, reported stronger-than-expected quarterly sales on Sunday. The result pointed to continued demand for AI hardware, which helped ease some of the pressure on chip stocks.
Samsung Earnings in Focus
Attention now turns to Samsung Electronics, which reports quarterly results on Tuesday. The world’s largest memory chip maker is expected to post an 18-fold increase in profit compared to the same period last year, well above its total for all of 2025.
JPMorgan strategists raised their target for the S&P 500, saying the AI supercycle will help push the index higher. They did warn, however, that the path won’t be smooth.
On the macro side, investors are watching U.S. services data released Monday. A weak June jobs report has already shifted expectations around interest rates. Federal Reserve meeting minutes, the first under new chair Kevin Warsh, are due Wednesday.
Baird investment strategist Ross Mayfield told Yahoo Finance the market remains in a bull run. “It’s a bull market driven by earnings and liquidity,” he said, adding he expects gains to continue into 2027.
Hedge funds may be locking in profits or positioning for a downturn in chip stocks, but Monday’s futures suggest some investors see the recent dip as a buying opportunity.
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