Goldman Sachs Sees Investors De-Risking From AI Stocks. At 63, She Finds the Same Crowded Trade Inside Her $900,000 401(k)

Quick Read

• Goldman’s Rich Privorotsky flagged the largest tech selling ever in Goldman’s prime brokerage book, citing rising capital costs and AI overcrowding.

• S&P 500, growth, and target-date funds all concentrate in the same mega-cap names, meaning a “diversified” 401(k) can carry 40% exposure to one AI trade.

• A 25% drop in that concentrated slice costs a $900,000 saver roughly $90,000, and at 63 that kind of forced selling turns paper losses into permanent ones.

• The biggest 401k decisions tend to get made once and never revisited: when to roll it over, what to hold inside it, and when to start taking money out. That is exactly what the report: 401k & IRA Tips and Answers was created to address, and it is free today. Read more here. (Sponsor)

Picture a 63-year-old with $900,000 in her 401(k), divided among an S&P 500 index fund, a growth fund and a target-date fund. She figures three funds mean three different sources of risk. Her situation is hypothetical, but the assumption is familiar.

Goldman Sachs just gave her a reason to check. On the firm’s The Markets podcast, recorded Oct. 22 and posted Oct. 23, Rich Privorotsky, head of European Equities Trading in Goldman’s FICC and Equities division, said investors were de-risking out of a crowded trade in AI, semiconductor and hyperscaler stocks. He cited rising capital costs, power constraints and more competition. He also said the prior week saw the largest tech selling ever recorded in Goldman’s prime brokerage book.

The pressure is showing up in stock prices. Invesco QQQ Trust (NASDAQ:QQQ) is down about 4% over the past month and still up about 16% this year. Privorotsky called hyperscaler earnings the key test, and those reports land alongside a Fed decision in a crucial two-week stretch for stocks.

Three Funds Sharing One Set of Top Holdings

Index funds weight companies by market value, so the largest companies take the largest slices. Vanguard S&P 500 ETF (NYSEARCA:VOO) had 38% of its assets in information technology at midyear.

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