Hedge Fund Net Exposure to Magnificent 7 Hits Record High of 22%, Crowded Trades May Amplify Market Correction Risks

PANews, October 10 - According to Hupzy (Spot On Chain), hedge funds' current net exposure to the "Magnificent 7" U.S. stocks has risen to 22%, a record high, surpassing the previous peak of 21% in June 2024 and up 7 percentage points from July this year. For comparison, at the bottom of the 2022 bear market, this metric stood at only 8%. The record-long positioning reflects strong institutional confidence in tech stocks, but it also implies that trades may be overly crowded and does not necessarily indicate the market will continue to rise. If the underlying investment logic changes, large-scale unwinding could trigger a sharp reversal and directly impact the S&P 500 perpetual contract market; a decline in risk appetite could also further pressure Bitcoin.

Additionally, hedge funds' net exposure to the semiconductor sector currently stands at 12%, slightly below the peak of 14% in June 2024, but significantly up from 2% at the start of 2025. Over the past three months, the increase in hedge funds' exposure to the Magnificent 7 has been the largest since 2023.