Pnl Protection > Pnl Generation": Goldman Warns Still-Crowded Mag7 Is The Next "Source Of Funds"

Goldman is warning that a still-crowded “Mag7” complex could become the next “source of funds” as hedge funds unwind AI-driven positioning. In Goldman’s weekend wrap, Ryan Sharkey notes October marked the month the AI trade broke, and hedge funds that rode it moved with it. He points to broad market stress: the Nasdaq 100 posted its worst month of underperformance versus the equal-weighted S&P since 2002, the SOX fell below its 200-day moving average for the first time since June 2025, and TMT-focused hedge funds lost 11.9% in October. Goldman's HF VIP vs. VIP Short basket also had its third-worst month in 15 years. By contrast, the S&P ex-AI gained 7.64%.