AI and chip stocks lose $5 trillion as other large US stocks gain

The AI stock selloff has erased about $5 trillion in market value since October 6, while hundreds of other large US stocks have gained ground. Yahoo Finance’s November 1 calculations show a sharp split: the biggest AI and chip names lost value as the other 625 stocks in its tally added about $1.3 trillion.

A falling index, mostly rising sectors

The split also appeared inside the S&P 500 during the final week of October. The index fell about 0.6%, yet nine of its 11 sectors rose about 1% or more. By Yahoo Finance’s calculations, no other declining week for the index since at least 1999 had more than seven sectors post gains of that size.

That makes the headline index decline an incomplete description of the week. Most sectors advanced even as the overall benchmark slipped. The market-value tally shows a similar contrast over the longer period since October 6: losses were concentrated in the AI and chip group, rather than shared by the other large stocks being counted.

Nvidia provides a more recent snapshot of the pressure on AI’s largest names. It closed November 2 at $202.06, down 15.54% from its October 6 closing high of $239.24, according to 24/7 Wall St. That company-level reading extends beyond the November 1 publication of Yahoo Finance’s aggregate calculation; it is not an updated total for the entire group.

Selling holdings versus betting against AI

Hedge-fund positioning adds another view of the retreat. In its November 3 article, 24/7 Wall St. cited Morgan Stanley data showing funds underweight the broader AI trade for the first time since early 2023. Funds had cut total stock exposure by more than 8% since June, their largest retreat since at least 2017.

Underweight means those funds hold less of the broad AI trade than their benchmarks do. It does not mean they have sold every AI holding. Nor does reducing an existing investment mean the same thing as opening a short position, which is a bet that profits when a stock falls.

Goldman Sachs data cited by the outlet showed five consecutive days of AI-stock selling in October, reversing all AI purchases made since the start of 2025. On the largest selling day, funds sold shares they already owned about 3.5 times faster than they opened new short positions. Selling existing holdings dominated that day’s activity, rather than new bets against the stocks.

A smaller position can still be crowded

The retreat has not erased the buildup in AI holdings. Goldman Sachs put hedge funds’ remaining AI positions in the top 17% of their range over the past three years, according to 24/7 Wall St. The bank also judged the unwind closer to its beginning than its end—an assessment of potential further selling, not a confirmed outcome.

The Morgan Stanley and Goldman readings answer different questions. One compares funds’ current AI exposure with a benchmark; the other compares holdings with their own recent history. Funds can therefore be underweight the broad trade while still holding historically large AI positions. The distinction matters when judging whether the selling has already cleared out the trade or left substantial holdings exposed to another retreat.