Leveraged ETF Assets Doubled in Two Months as AI Mania Drives Investors Into High-Risk Instruments

Leveraged ETFs linked to AI and tech themes have surged dramatically over a roughly two-month stretch. According to Goldman Sachs strategist Christian Mueller-Glissmann, citing EPFR data, total net assets in leveraged U.S. equity ETFs doubled from $39 billion in April to $84 billion by end of May 2026.

That's $45 billion in new money piling into instruments designed to deliver 2x or 3x the daily return of an underlying index.

South Korea and Taiwan-linked leveraged ETFs moved even faster — jumping from $17 billion to $43.1 billion in the same window, per Goldman's data reported by CNBC.

Why Korea and Taiwan?

These two markets sit at the physical center of the AI supply chain.

SK Hynix — a critical memory chip supplier to Nvidia — and Samsung Electronics together account for over 40% of South Korea's Kospi benchmark. Taiwan Semiconductor Manufacturing Company (TSMC) accounts for over 40% of Taiwan's Taiex.

If you believe AI infrastructure spending continues at pace, these are the companies making the physical hardware that makes it possible. Investors know it.

The Problem with the Rally

Adam Crisafulli, founder of Vital Knowledge, put it plainly to CNBC: "It does seem like it's in unsustainable territory. You've got major stocks like Dell double in a handful of days, so the parabolic price action usually can't last forever."

He also flagged something important that the bull narrative conveniently glosses over: AI is generating enormous revenue growth across a wide range of firms, but actual earnings and cash flow are only materializing at a handful of companies — primarily memory and chip makers.

Everyone else is spending. Very few are cashing in.

How These Products Work

Leveraged ETFs use derivatives — swaps, futures — to amplify daily returns. A 2x fund goes up twice as much on a good day. It goes down twice as much on a bad one.

They are built for short-term tactical trades, NOT long-term holds. Due to daily rebalancing mechanics, holding them through volatility destroys value over time — a dynamic called "volatility decay" that most retail investors have never heard of.

The UK's Financial Conduct Authority warned firms earlier this year, according to The Daily Upside, to "regularly review the value your products provide" and restrict access "where necessary." That warning isn't making headlines in the U.S.

New Products Are Still Being Filed

Fund managers Defiance and GraniteShares filed for a wave of new leveraged ETF products as recently as mid-May 2026, according to The Daily Upside. The filings target semiconductor companies like STMicroelectronics and MaxLinear, plus robotics, data storage, and AI infrastructure.

GraniteShares already runs the 2x Long NVDA Daily ETF (ticker: NVDL), which tracks Nvidia stock with double leverage.

Meanwhile, a single-stock leveraged play on SanDisk — the Tradr 2X Long SNDK Daily ETF — has returned 640% in just over three months, according to Benzinga, driven by a breakout in SanDisk shares. That kind of return attracts retail money like moths to a flame, right before the flame gets bigger.

ASML Hits Record. Intel Gets a New Bull Thesis.

On the broader market side, ASML — the Dutch company that makes the ultra-precise machines used to manufacture advanced chips — became Europe's most valuable stock ever, according to Bloomberg, riding AI-driven demand for semiconductor equipment.

On the U.S. side, Jim Cramer's Charitable Trust disclosed it initiated a position in Intel at roughly $114 per share, buying 400 shares, according to CNBC. The thesis: Intel CEO Lip-Bu Tan is rebuilding the foundry business, and the ratio of CPUs to GPUs in AI server racks is shifting. Intel CFO David Zinsner described the turnaround at a Bank of America conference, saying the old Intel was "like trying to fly the plane and fix the wing at the same time." Whether that metaphor signals progress or just better PR remains to be seen.

What the Surge Really Signals

Most financial media is treating this ETF surge as validation of the AI trade. It's better understood as a sentiment indicator — and historically, retail leverage surges like this show up late in rallies, not at the beginning.

Morgan Stanley strategist Andrew Weaver sees continued AI-driven equity momentum, according to Bloomberg. That may well be right. But "momentum continues" and "this is a safe place to put retirement savings" are two very different sentences.

Mueller-Glissmann at Goldman raised the red flag explicitly: money flowing into leveraged instruments can reverse faster and harder than regular equity selling, because losses are amplified and margin calls accelerate the exit.

Crisafulli also noted markets will have to absorb significant new supply in coming months — IPOs, secondaries, convertibles — which is a real test for a rally running on narrative and leverage.

What's Really Happening

AI is a legitimate technological shift. The infrastructure buildout is real. But $84 billion in leveraged AI bets, built on daily-reset derivatives, held by retail investors who think they've found a shortcut — that's not investing. That's speculation at scale, and the people who get hurt when it unwinds are not the Goldman strategists writing the research notes.