Hedge funds fold on the AI trade as retail piles into Nvidia, says Morgan Stanley’s Savone

Morgan Stanley's Nick Savone sees professionals cutting risk to yearly lows while individual investors keep buying the AI bellwether Wall Street’s professionals and its weekend warriors are reading the same market and reaching opposite conclusions. According to Morgan Stanley ’s Nick Savone, hedge funds have pulled back hard from the AI trade, while retail investors have been aggressively buying Nvidia . The backdrop is rough. Savone was assessing the damage from what he described as a record 70% tech momentum crash, a violent unwind in the stocks that had been leading the market higher. Hedge funds responded by de-risking aggressively. Savone put their net leverage at the 0th percentile of the past year. That figure deserves a plain-language gloss.

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