The AI trade has been one of the most crowded rooms on Wall Street, and someone just yelled fire.
Heading into the summer of 2026, investor positioning in AI and semiconductor stocks has reached levels that are starting to make even bullish analysts nervous. High leverage in AI-related ETFs, sharp swings in semiconductor prices, and a broader sense that everyone is already in the pool have converged into a setup that strategists are flagging as a recipe for a rough few months.
Goldman Sachs strategist Shawn Tuteja has warned that markets are underestimating the likelihood of sharp corrections in AI-related stocks, describing the potential fallout as “violent corrections” even within an overall bullish trend.
How we got here
The S&P 500 notched one of its strongest two-month runs on record heading into late May 2026, with AI stocks serving as the primary engine.
