{"id":638,"date":"2025-01-28T14:29:16","date_gmt":"2025-01-28T15:29:16","guid":{"rendered":"https:\/\/howtobigisland.com\/?p=638"},"modified":"2025-01-28T16:57:21","modified_gmt":"2025-01-28T16:57:21","slug":"who-foresaw-the-deepseek-caused-sell-off-of-magnificent-7-stocks-hedge-funds-which-have-been-cutting-exposure-for-months","status":"publish","type":"post","link":"https:\/\/howtobigisland.com\/index.php\/2025\/01\/28\/who-foresaw-the-deepseek-caused-sell-off-of-magnificent-7-stocks-hedge-funds-which-have-been-cutting-exposure-for-months\/","title":{"rendered":"Who foresaw the DeepSeek-caused sell-off of Magnificent 7 stocks? Hedge funds, which have been cutting exposure for months."},"content":{"rendered":"<figure><img loading=\"lazy\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" height=\"1509\" width=\"2000\" alt=\"Man looks at trading screen\" class=\"lazyload\" data-src=\"https:\/\/howtobigisland.com\/wp-content\/uploads\/2025\/01\/670004fe3f2165d716de75d0\"><figcaption>Big-name US tech companies have slumped thanks to the Chinese AI company DeepSeek.<\/p>\n<p class=\"copyright\">LIU JIN\/AFP via Getty Images<\/p>\n<\/figcaption><\/figure>\n<ul class=\"summary-list\">\n<li>New releases from the Chinese AI firm DeepSeek tanked stocks like Nvidia, Tesla, and Alphabet.<\/li>\n<li>DeepSeek&#8217;s open-source AI models led to a market rout of hundreds of billions of dollars.<\/li>\n<li>Hedge funds have been exiting Magnificent 7 stocks for half a year, Goldman Sachs said.<\/li>\n<\/ul>\n<p><a target=\"_blank\" class=\"\" href=\"https:\/\/www.businessinsider.com\/what-is-deepseek-r1-china-ai-2025-1?utm_medium=ingest&amp;utm_source=markets&amp;_gl=1*1mfixn7*_ga*MTMxNjM1ODc0OC4xNzI3NzAyNTI4*_ga_E21CV80ZCZ*MTczODA3Njg5OS4xOTAuMS4xNzM4MDc2OTIwLjM5LjAuMA..\" rel=\"noopener\">DeepSeek<\/a> \u2014 the Chinese AI company that has upended the US tech industry with its open-source models \u2014 caused the US stock market to lose <a target=\"_blank\" class=\"\" href=\"https:\/\/markets.businessinsider.com\/news\/stocks\/us-stock-futures-nvidia-recover-deepseek-tech-wipeout-2025-1?_gl=1*1tzxv7l*_ga*MTY2MjUxMDM5OS4xNzIxMjIxNzg3*_ga_E21CV80ZCZ*MTczODA3NTg0NC42NjEuMS4xNzM4MDc2ODc1LjYwLjAuMA..\" rel=\"noopener\">hundreds of billions of market value<\/a> within a day.<\/p>\n<p>The pain was felt by stockholders of the biggest names of the past couple of years: Nvidia, Tesla, Alphabet, and more. Those mega-cap companies and the rest of the so-called Magnificent 7 were the driving force behind the S&amp;P 500&#8217;s 23% gain in 2024 and became must-haves for many hedge funds.<\/p>\n<p>However, it appears many of those hedge funds started to crystallize some of their gains before the recent sell-off.<\/p>\n<p>A Goldman Sachs report from the bank&#8217;s prime services unit, which caters to the biggest hedge funds in the world, said managers had been steadily selling out of Magnificent 7 stocks since June. The report notes that exposure to these stocks was at the lowest levels since mid-2023 after hitting a high last summer.<\/p>\n<p>&#8220;Mag7 stocks collectively now make up ~15.5% of total US Net exposure,&#8221; the January report said. In June, it was at 21%.<\/p>\n<p>There was likely still plenty of pain felt across <a target=\"_blank\" class=\"\" href=\"https:\/\/www.businessinsider.com\/where-hedge-fund-investors-are-based-new-york-us-2025-1\" rel=\"noopener\">midtown Manhattan<\/a> and Greenwich, Connecticut, though the full extent won&#8217;t be clear until funds&#8217; January returns trickle out.<\/p>\n<p>Regulatory filings on hedge funds&#8217; holdings are delayed, so it can be difficult to gauge what funds are doing in real time. But these filings provide a snapshot of how invested managers were at a certain point in time \u2014 and who got out before disaster struck.<\/p>\n<p>A review of the filings revealed several big names that moved in and out of these stocks.<\/p>\n<p>For example, <a target=\"_blank\" class=\"\" href=\"https:\/\/www.businessinsider.com\/lone-pine-spinouts-struggle-except-mala-gaonkar-surgocap-tiger-cubs-2024-10\" rel=\"noopener\">Mala Gaonkar&#8217;s SurgoCap Partners<\/a> sold its stakes in Microsoft and Nvidia during the third quarter while adding a large position in Meta, which has been mostly unaffected by the sell-off. The billionaire Stanley Druckenmiller&#8217;s family office also liquidated nearly all of its Microsoft and Nvidia holdings over the same period.<\/p>\n<p>Philippe Laffont&#8217;s Coatue sold large chunks of its Nvidia and Meta positions but added to its Microsoft, Amazon, and Alphabet stakes. <a target=\"_blank\" class=\"\" href=\"https:\/\/www.businessinsider.com\/hedge-funds-2025-viking-walleye-lone-pine-eisler-openai-2024-12\" rel=\"noopener\">Alex Sacerdote&#8217;s Whale Rock<\/a> trimmed its Meta, Nvidia, and Alphabet holdings, but added to its largest position, Amazon, in the third quarter.<\/p>\n<p>The already busy year for Magnificent 7 stock analysts won&#8217;t slow down anytime soon \u2014 Microsoft, Meta, Tesla, and Apple are all set to report earnings later this week.<\/p>\n<div class=\"read-original\">Read the original article on <a href=\"https:\/\/www.businessinsider.com\/hedge-funds-tech-sell-off-deepseek-magnificant-7-stocks-2025-1\">Business Insider<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Big-name US tech companies have slumped thanks to the Chinese AI company DeepSeek. LIU JIN\/AFP via Getty Images New releases from the Chinese AI firm DeepSeek tanked stocks like Nvidia, Tesla, and Alphabet. DeepSeek&#8217;s open-source AI models led to a market rout of hundreds of billions of dollars. Hedge funds have been exiting Magnificent 7 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":640,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/howtobigisland.com\/index.php\/wp-json\/wp\/v2\/posts\/638"}],"collection":[{"href":"https:\/\/howtobigisland.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/howtobigisland.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/howtobigisland.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/howtobigisland.com\/index.php\/wp-json\/wp\/v2\/comments?post=638"}],"version-history":[{"count":2,"href":"https:\/\/howtobigisland.com\/index.php\/wp-json\/wp\/v2\/posts\/638\/revisions"}],"predecessor-version":[{"id":641,"href":"https:\/\/howtobigisland.com\/index.php\/wp-json\/wp\/v2\/posts\/638\/revisions\/641"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/howtobigisland.com\/index.php\/wp-json\/wp\/v2\/media\/640"}],"wp:attachment":[{"href":"https:\/\/howtobigisland.com\/index.php\/wp-json\/wp\/v2\/media?parent=638"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/howtobigisland.com\/index.php\/wp-json\/wp\/v2\/categories?post=638"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/howtobigisland.com\/index.php\/wp-json\/wp\/v2\/tags?post=638"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}