Assets in leveraged ETFs tied to AI and tech have doubled in barely two months, and the scramble is not confined to the US. Goldman Sachs data tracking hundreds of leveraged funds shows US leveraged equity ETF assets jumping to $84 billion by the end of May, up from $39 billion in April, while leveraged funds in South Korea and Taiwan more than doubled to $43.1 billion over the same stretch. The surge tracks the broader AI rally almost perfectly, as investors chase maximum daily exposure to the trade rather than settling for the plain vanilla version. That kind of parabolic growth in products designed to double or triple daily moves is exactly the setup that turns a normal pullback into a much uglier one, since leveraged ETFs amplify losses just as sharply as gains.

Finsum: When leveraged fund assets double in two months, that is a crowding signal, not a conviction signal, and crowded trades built on daily leverage tend to unwind far faster than they built up.