Three Strikes: Quants Suffer Worst Day Since August As Hedge Funds Notch Third "Never Since COVID" Day Of 2026

Selling the AI stocks was the easy part. Then came the bill.

Earlier today we showed that amid the ongoing AI rout driven by sudden credit fears, hedge funds had dumped AI stocks at the second-fastest pace in a year, round-tripping every dollar of net AI buying since January 2025 in just five sessions. That covered the flows through Wednesday. On Thursday, Goldman Prime's Marco Laicini sent two follow-up notes (here and here) tracking what all that de-grossing did to the P&L in real time, and the short version is in the first line of his close update:

Momentum Down 3.4 Sigma, Shorts Up 1.2 Sigma