Why leverage turned the AI chip sell-off into a market rout as leveraged ETFs and margin calls deepened losses

Why leverage turned the AI chip sell-off into a market rout as leveraged ETFs and margin calls deepened losses

SOXX down 25%; leveraged SOXL fell 63% due to daily-reset compounding. South Korea KOSPI down 40% as margin calls triggered forced retail liquidations. Leverage unwind signals overpriced AI/chip valuations; hedge funds derisk forcing CTO capex re-evaluation on hyperscaler spending sustainability.