Goldman Sachs' Privorotsky calls AI stock selloff a rotation, not a liquidation
In brief
- Goldman Sachs' Rich Privorotsky called the AI unwind a rotation, not a liquidation, per Crypto Briefing.
- Memory chipmakers fell hardest: Kioxia down 13%, SK Hynix 10%, Samsung 8%.
- South Korea's KOSPI fell 5.5% as the selloff reportedly traced back to CXMT weakness.
- Goldman framed the volatility as a healthy reset after positioning became overly crowded.
Memory chipmakers took the worst of it
The damage was concentrated. Memory chipmakers took the worst of the AI stock decline, Crypto Briefing reported, and the selloff reportedly traced back to weakness at CXMT (a Chinese memory manufacturer) around October 12.
South Korea's KOSPI index fell 5.5%. Samsung shares dropped 8% and SK Hynix fell 10%, while Kioxia declined 13%, the largest drop of the three, according to the same report.
"Long one corner"
Privorotsky's read on positioning was blunt.
"Long one corner, short everything else."
Futures told a similar story. Nasdaq futures fell approximately 70 basis points while Russell futures rose around 30 basis points, Crypto Briefing reported.
That's Goldman's reading of the moves, though, not a settled verdict. Chip stocks hadn't stopped sliding: the SOXX semiconductor index was under pressure and potentially headed for a sixth consecutive down day, according to the same report.
Goldman framed the volatility as a healthy reset for the AI sector. The bank's view, as cited by Crypto Briefing, is that positioning had become overly crowded during a period of high volatility, which left the trade vulnerable to a sharp shakeout.
Hedge funds cut tech, kept the mega-caps
Hedge fund data cited in Goldman's commentary showed funds had substantially cut their technology exposure, according to Crypto Briefing. They haven't abandoned the space, though. The same data showed funds kept robust positions in a select group of mega-cap stocks.
Crypto Briefing also described money moving away from semiconductors and hardware toward software, infrastructure and higher-quality names.
It's not the first time Goldman has made this case.
In July 2026, Goldman described an earlier round of tech selling as the largest in a decade, but characterized it as a tactical adjustment rather than a loss of conviction in the AI investment thesis, according to Crypto Briefing. Goldman's October view echoes that argument, the outlet reported: investors are moving money around inside the AI trade, not walking away from it.
Frequently asked questions
What reportedly triggered the AI chip selloff?
According to Crypto Briefing, the selloff reportedly traced back to weakness at CXMT, a Chinese memory manufacturer, around October 12. Memory chipmakers took the worst of the decline, with Kioxia falling 13%, SK Hynix 10% and Samsung 8%.
Why does Goldman Sachs call the AI selloff a rotation rather than a liquidation?
According to Crypto Briefing, Goldman's Rich Privorotsky said investors are moving money around inside the AI trade rather than walking away from it. Hedge fund data cited in Goldman's commentary, as reported by Crypto Briefing, showed funds cut tech exposure but kept robust positions in select mega-caps. Crypto Briefing separately described money moving from semiconductors and hardware toward software, infrastructure and higher-quality names.
