Concerns over potential extremes in the market prompted hedge funds to reduce their exposure to the so-called Magnificent Seven megacap tech stocks in the final quarter of last year, according to a report by Bloomberg.

The report cites a note written by Goldman Sachs strategists including Ben Snider and Jenny Ma, analysing $2.6tn of gross equity positions across 722 hedge funds, as revealing that they turned "net sellers" of most of the Magnificent Seven, with all bar Amazon seeing a decrease in exposure.

The reduction came as the weights of Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta and Tesla rose to record levels, according to Goldman's note, and could indicate an increasing uncertainty among investors about whether they can maintain last year's performance.

An index of the seven stocks was up 106% in 2023 against the 24% gain seen in the wider S&P 500 over the year.