AI Stock Basket Underperforms S&P 500 by 22% in Record Relative Decline

A basket of AI stocks trailed the S&P 500 excluding those names by 22% over the last two weeks, marking the largest relative underperformance for the sector on record. The decline was driven by broad hedge fund liquidations, including a de-grossing event on Oct 22 that ranked as the 5th-largest of 2026 and the most substantial episode of long sales since September 2025. The slump brings the total drawdown for the AI basket since June to 28%, erasing nearly all of the 100% year-to-date gains it had posted by the end of June.