Hedge funds extended their selling of semiconductor stocks into a fourth straight week, according to Reuters, as the AI-driven rally that powered names like NVDA, AMD, and AVGO through much of 2024 faces renewed pressure. The four-week streak of net selling signals a sustained, not opportunistic, institutional reduction rather than a single-session risk-off flush.

NVDA remains the most consequential name in focus — revenues hit $215.9B in FY2026 (ended Jan 25), up 65.5% YoY, with a 71.1% gross margin and $4.90 diluted EPS that are genuinely extraordinary by any sector comparison. AMD ($34.6B rev, +34.3% YoY) and AVGO ($63.9B rev, +23.9% YoY) also carry strong fundamental profiles, yet all three are caught in the same institutional selling wave.

The tension here is classic: hedge fund positioning data lags price, meaning four weeks of selling could mean the 'smart money' exit is already largely complete and a re-entry window is forming — or it could mean the unwind has further to run as AI capex narratives get stress-tested against actual hyperscaler spend data.

What to watch: whether the selling is concentrated in NVDA (highest valuation multiple, most crowded trade) or rotating into AMD/AVGO as relative-value plays, and whether upcoming hyperscaler earnings commentary on AI capex arrests the outflow or accelerates it. A stabilization in fund flow data — particularly prime brokerage net positioning — is the cleaner catalyst signal than price action alone.