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Hedge funds' net exposure to the "Magnificent 7" hits record high of 22%; crowded trades may heighten market pullback risk
PANews, October 10 – According to Hupzy (Spot On Chain), hedge funds' net exposure to the U.S. stock market's "Magnificent 7" has risen to 22%, a record high, surpassing the 21% peak in June 2024 and up 7 percentage points from July this year. By comparison, the metric stood at just 8% at the bottom of the 2022 bear market. The record long positioning reflects strong institutional confidence in tech stocks, but it also means trades may be overly crowded and does not necessarily mean the market will keep rising. If the relevant investment logic changes, large-scale unwinding could trigger a sharp reversal and directly hit the S&P 500 perpetual futures market; declining risk appetite could also put further pressure on Bitcoin.
In addition, hedge funds' net exposure to the semiconductor sector currently stands at 12%, slightly below the 14% peak in June 2024 but significantly higher than the 2% at the start of 2025. Over the past three months, hedge funds' increase in exposure to the Magnificent 7 has been the largest since 2023.
Source: PANews