Tech stocks have hurt major hedge funds, losing hundreds of millions of dollars by the end of July before this week's sharp decline

Tech stocks that made hedge funds big profits last year have caused them to lose over a billion dollars in the past month.

Media reports indicate that the mid-July stock market downturn, caused by heavy buying of popular tech stocks, has resulted in losses of hundreds of millions of dollars for some of the world's top hedge funds. Insiders revealed that the hardest hit funds include Glen Kacher's Light Street Capital Management, Bill Ackman's Pershing Square Capital Management, and Philippe Laffont's Coatue Management.

Specifically, in July, Light Street's hedge fund reported a loss of 9.2%, Pershing with only 13 long positions had a return of -4.7%, Coatue's fund had a return of -3.6%, Tiger Global Management suffered a loss of 1.9%, and Viking Global Investors, with fewer tech investments than its peers, had a return of -0.1%.

However, since the beginning of this year, the above-mentioned funds have still maintained positive returns, with Light Street's fund achieving a return of 40.3%, Pershing at 0.7%, Coatue at 5.3%, Tiger Global at 10.7%, and Viking Global at 8.1%.

These returns do not take into account the painful results of the global stock market crash on Monday. US stocks experienced their largest single-day drop in nearly two years, with the Nasdaq falling over 6% at one point and closing down over 3%. The S&P 500 fell over 4%, nearing a technical correction, while the Dow Jones Industrial Average closed down over a thousand points. Apple dropped nearly 5%, marking its largest single-day decline since September 2022, and Nvidia initially fell over 15% before recovering to a decline of over 6% at the close. The "fear index" VIX, which measures stock market volatility, surged by 181% to 65.73 at the start of Monday, reaching a new high since the early days of the COVID-19 pandemic in March 2020, and closed up by approximately 40.3%.

In the first three trading days of August leading up to Monday, the Nasdaq 100 index fell by 7.6%, marking its worst monthly start since 2008. Bloomberg's Magnificent 7 Total Return Index, which tracks an equal-weighted stock index of the seven US tech giants - Microsoft, Apple, Nvidia, Google parent Alphabet, Amazon, Meta (formerly Facebook), and Tesla - dropped by around 9% over three days. According to PivotalPath's proprietary model, a 9% drop implies that hedge funds in the technology, media, and communications sectors managing over $1 billion have incurred losses of up to 4%.

US stocks rebounded slightly on Tuesday, with the S&P and Nasdaq rising over 2% at one point and closing up by about 1%, while the Dow gained nearly 300 points, rising by less than 0.8%. The VIX fell by over 28% Jon Caplis, founder of the hedge fund research firm PivotalPath, stated that in the past few months, there have been "signs" of this week's market crash. He said, "Funds have been net sellers of blue-chip tech stocks. We also see many clients and funds expressing concerns about over-investing in the US and its highly concentrated stock market, where the fate of a few participants could change the entire market."

Among top funds, Jim Simons' Renaissance Technologies and David Einhorn's Greenlight Capital have performed relatively well. The Renaissance Institutional Diversified Alpha and Greenlight had monthly returns of 4.2% and 2.3% respectively, with year-to-date returns of 14.5% and 11%.

Greenlight is not a stock fund, but rather a multi-strategy fund. These funds that trade multiple assets have performed relatively well in the recent stock market downturn, with less than 1% profit and loss in July. However, the stock sell-off has also affected their returns, as they typically aim for a monthly return of at least 1%