Quick Read – Goldman Sachs data shows leveraged semiconductor ETF assets collapsed $63 billion from June’s peak, a 39% drawdown to $100 billion. – Despite the pullback, leveraged semiconductor ETF assets remain 400% above January 2023 levels, proving investors are trimming…
verage, not abandoning AI. – Goldman Sachs warns the $200 billion leveraged ETF market could amplify future sell-offs if investors unwind positions simultaneously. – Artificial intelligence remains one of the market’s strongest investment themes, driving record spending on chips, data centers, and computing infrastructure. Semiconductor companies have become the picks-and-shovels providers of this digital gold rush, and investors have poured billions into funds designed to amplify those gains
But while the AI story remains intact, another trend is emerging: investors are becoming more cautious about how much risk they are taking. According to Goldman Sachs data, a major leverage unwind is underway in semiconductor ETFs. Investors are not abandoning AI — they are reducing the amount of borrowed risk they are using to chase the opportunity.
The next phase of the AI trade may depend less on whether the technology succeeds and more on whether investors are positioned to withstand the volatility that comes with it. Investors Loaded Up On Leveraged AI Bets Leveraged ETFs became one of Wall Street’s fastest-growing corners as investors searched for ways to multiply their exposure to the semiconductor boom. These funds use derivatives to deliver returns that are typically two or three times the daily performance of an underlying index.