The net exposure of the Magnificent Seven hedge funds rose to a record high of 22%, and crowded trades may exacerbate the risk of a market pullback.

PANews October 10 news, according to Hupzy (Spot On Chain), hedge funds' net exposure to the U.S. "Magnificent 7" has now risen to 22%, a record high, surpassing the 21% peak on June 21, 2024, and up 7 percentage points from July this year. By comparison, at the bottom of the 2022 bear market, this indicator was only 8%. The record long position reflects institutions' strong confidence in tech stocks, but it also means the trade may be overly crowded and does not necessarily mean the market will continue to rise. If the relevant investment thesis changes, large-scale liquidation could trigger a sharp reversal and directly hit the S&P 500 perpetual futures market; a decline in risk appetite could also put further pressure on Bitcoin.

In addition, hedge funds' net exposure to the semiconductor sector is currently 12%, slightly below the 14% peak on June 21, 2024, but significantly up from 2% at the beginning of 2025. Over the past three months, hedge funds' increase in exposure to the Magnificent 7 has been the largest since 2023.