Goldman Sachs data shows that US fundamental long/short funds are significantly underweight, with total leverage at the 27th percentile over the past year and net leverage at only the 4th percentile. Implied volatility in the semiconductor sector has also fallen from approximately 65 in July to 36, nearly halved, indicating that the market believes future stock price volatility has decreased. However, the options market has not significantly increased its pricing of downside risk. Goldman Sachs therefore believes that in an environment of light positioning, low volatility, and numerous AI catalysts, it is suitable to bet on an unexpected surge in AI stocks through options. On Friday, some upward option buying began to reappear in the market. They suggest going long on the broad AI basket and shorting the S&P 500 excluding AI. (The above views are from a Goldman Sachs report dated September 6th.)
