Hedge funds reduced exposure to major US technology stocks and, in some cases, increased bearish positions in the days leading up to SpaceX’s public listing, according to a report by Reuters citing trading data from JPMorgan.
The pullback was concentrated in the so-called “Magnificent Seven” group — Nvidia, Apple, Amazon, Alphabet, Meta, Tesla and Microsoft — all of which have fallen since early June. The Roundhill Magnificent Seven ETF, which tracks the cohort, declined more than 2.4% over the period.
Analysts suggested the repositioning may have been linked to portfolio adjustments ahead of SpaceX’s highly anticipated IPO, which is expected to be one of the largest listings on record with a target valuation of $1.77 trillion.
JPMorgan data indicated that hedge funds broadly de-risked in US equities, with notable selling in software names while semiconductor stocks attracted renewed buying interest. At the same time, some investors stepped in to buy the dip across selected tech names.
Sector positioning was mixed outside technology. Financial-focused ETFs saw net inflows over the week, supported by seasonal trends that typically favour the sector, although hedge fund positioning in banks remained uneven.
Insurance stocks saw renewed interest from some funds, but overall remain heavily under-owned year-to-date, while asset manager positioning showed a preference for traditional firms over alternative managers.
The data points to a broader rotation in positioning as investors recalibrate risk exposure across equity markets ahead of a major new public market entrant in the technology space.
