Hedge funds are significantly reducing their exposure to the Magnificent 7 stocks, with their holdings dropping to the lowest level since mid-2023. This sell-off has accelerated, surpassing the pace seen during the 2022 bear market. The Magnificent 7 stocks have collectively lost approximately $3.5 trillion in market capitalization since their peak earlier this year, with a decline of about 14% since reaching those highs. For the first time in two years, these stocks are trading below their 200-day moving average. Meanwhile, retail investors have shown contrasting behavior, purchasing a record $12 billion in equities during the first week of February, with around 70% of those investments directed towards the Magnificent 7. In total, institutional investors have sold U.S. equities for four consecutive weeks, with index and ETF products accounting for 45% of the overall selling activity.