Buy, Buy... Bye

It’s official: Investors are making their Great AI-scape.

Hedge funds are dumping tech stocks at the fastest pace since Goldman Sachs began tracking the data more than a decade ago. They’ve been net sellers of the sector in six of the past eight weeks, cutting their exposure by roughly 10% during that time.

Investors appear to be locking in gains as questions grow over the sky-high valuations and massive spending commitments of AI companies. At the same time, money is rotating into more defensive corners of the market like consumer stocks. Last week, technology was the S&P 500’s worst-performing sector, with sales led by hardware, IT services, and storage companies, while semiconductors and software also saw outflows.

Insiders cash out

Hedge funds trade in and out of positions all the time, so their selling isn’t necessarily a red flag. But they’re not the only ones heading for the exits.

Corporate insiders—the executives and directors who arguably know their companies best—are selling shares at the second-fastest pace in two decades. The only period with heavier selling came during the pandemic-era market boom, when stimulus-fueled stocks were soaring.

More specifically, insiders dumped $77.6 billion of stock in the first half of 2026, up 20% from a year ago, while buying totaled just $6.9 billion—barely above last year’s seven-year low.

Stockpiling stock

Both hedge funds and insiders appear to be taking profits and selling at the exact same time stocks are searching for buyers: Companies are issuing new shares at the fastest pace in years, while stock buybacks—one of the market’s biggest sources of demand—are slowing.

According to Dealogic, companies have already raised $344.7 billion through equity and equity-linked offerings this year—more than the full-year totals in each of the past four years. That trend is expected to continue, with analysts forecasting US companies will issue a net $500 billion of equity over the next year.

This can’t be good

Investors have seen this pattern before: companies rushing to issue stock when valuations are high, just as they did before the dot-com bubble burst.

That doesn’t mean history is going to repeat itself. But with hedge funds trimming exposure, insiders cashing out, and companies scrambling to sell shares at their highest rate in years, it’s fair to wonder why all the smart money is suddenly searching for the exits.—SY