--- title: "Goldman Sachs Trading Desk: Current US Stock Market Is \"Extremely Violent,\" AI Investment Logic Is Being Restructured" type: "News" locale: "en" url: "https://longbridge.com/en/news/296565148.md" description: "Goldman Sachs believes that anxiety over AI investment has shifted from the \"authenticity of demand\" to whether \"growth can match high valuations.\" As inference costs plummet sharply, the moats of computing power sellers and upstream supply chains are becoming increasingly fragile, putting pressure on sector valuations. NVIDIA's earnings report is expected to be only a neutral catalyst. On the macro front, the US Treasury's expansion of long-end Treasury buyback scales could have profound implications for a weaker US dollar and rising gold prices" datetime: "2026-08-21T03:54:41.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/296565148.md) - [en](https://longbridge.com/en/news/296565148.md) - [zh-HK](https://longbridge.com/zh-HK/news/296565148.md) generator: "portal-rs" --- # Goldman Sachs Trading Desk: Current US Stock Market Is "Extremely Violent," AI Investment Logic Is Being Restructured Beneath the seemingly calm surface of the US stock market, a brutal deleveraging shuffle is actually underway behind the scenes. Rich Privorotsky, Head of Delta-One Trading at Goldman Sachs, stated bluntly in his latest report that recent market movements can only be described as "extremely violent." In this storm, systematic funds have collectively suffered heavy losses, while the core AI investment narrative that supported the US stock bull market over the past two years is undergoing fundamental disruption and restructuring. Privorotsky believes that while the long-term adoption prospects for AI remain optimistic as model economics continue to improve rapidly and inference costs compress sharply, the moats for computing power sellers, model access service providers, and parts of the upstream "picks and shovels" supply chain are becoming increasingly unsustainable. The sector as a whole faces continuous pressure for valuation compression. ## Systematic Funds Hit Hard, Market Correlations Are Unraveling **From a data perspective, the actual impact of this correction is far more brutal than what major stock indices suggest.** According to Marco Laicini, a trader in Goldman Sachs' Prime Brokerage business, managers of systematic long-short strategies saw a single-day drop of 1.4%, marking their worst single-day performance in over two years. This decline exceeded three standard deviations of daily volatility over the past three years. Among these, the global momentum factor alone plunged by 4.7 standard deviations in a single day, while the Goldman Sachs US Momentum Factor dropped nearly 7% in just 48 hours, with losses quickly spreading to major global markets. On Thursday, the three major US stock indices closed lower. The Dow Jones Industrial Average plummeted by 703.84 points, and the Nasdaq 100 Index fell for the fifth consecutive session, dropping 0.72% during the day. The VIX rose 7.52% to 16.01. **What surprised Privorotsky was that such violent volatility erupted even after the large-scale position reductions in July.** He pointed out that the current severe two-way fluctuations in the market are largely typical of a "liquidity trap." During the traditional low-liquidity August period, leveraged capital that had previously made quick profits blindly rushed back into semiconductor and momentum sectors, causing overall leverage levels within the system to surge again. Under this positioning structure, the sharp decline in sectors like semiconductors directly triggered passive selling by quantitative funds. **Therefore, investors should avoid overinterpreting intraday price movements; the current volatility is more due to a stampede of capital rather than a comprehensive deterioration in fundamentals.** ## **AI Investment Logic Restructured, "Shovel Sellers" Under Pressure** However, beyond capital games, the fundamental logic of the AI sector has indeed reached a crossroads for revaluation. Privorotsky believes that the core of the current market debate has shifted. People are no longer doubting "whether AI demand is real," but are worried about "whether future growth can continue to match already extremely high expectations." A key marginal change is occurring: the operational economics of large models are improving at an astonishing speed. Taking models like Qwen as examples, more and more smaller, lower-cost models are delivering increasingly powerful usable intelligence. **"Usable intelligence output per dollar" is experiencing explosive growth, and competition is emerging in multiples. This trend is undoubtedly strongly positive for overall AI adoption rates and the macro economy, but it sounds an alarm for certain vested interests in the industrial chain.** Privorotsky explicitly pointed out that as the benefits of compressed inference costs continue to be released, companies selling computing power access and model interface services will find their "moats" increasingly difficult to sustain. Similarly, parts of the upstream "picks and shovels" supply chain face similar revaluation pressures. **The entire AI sector is likely to see a split phenomenon in the future: while corporate earnings per share (EPS) continue to rise, the sector's overall valuation will continue to be revised downward.** **Current valuations falling to the lower end of the range is still reasonable, but due to the elongated window of uncertainty from 2027 to 2028, the market finds it difficult to blindly chase highs anymore.** ## **NVIDIA's Strong Earnings Unlikely to Be a Surge Catalyst** Based on this logic, the upcoming NVIDIA earnings report may hardly serve as a catalyst for a market surge. Privorotsky expects that although NVIDIA's final reported figures will likely remain very impressive, this will probably be just a "neutral catalyst." **Because the market's scrutinizing gaze has shifted from the demand side to deeper details, such as financing structures, changes in gross margins, and how profits are redistributed across various links in the industrial chain.** **** In particular, memory inflation and supply bottlenecks are becoming key variables affecting profit margins. This means that even if NVIDIA releases strong spending signals, certain links such as the memory supply chain may not react with synchronized optimism after digesting the earnings details. **In comparison, more substantive supporting catalysts may have to wait until the dense season of industry conferences in September.** ## **US Treasury Buyback Signal: Deeper Implications for the US Dollar and Gold** **Beyond the stock market and the AI industrial chain, another macro-level code is hidden in the US Treasury market.** The US Treasury Department recently announced that it would at least double the single-operation limit for long-end liquidity buybacks from $2 billion to $4 billion, covering medium-to-long-end Treasuries with maturities of 10 to 30 years, with execution extending at least until early November. Privorotsky specifically emphasized the importance of the word "at least," implying that the policy does not set a hard ceiling, obviously opening the door for further increases if necessary. Mechanistically, this move is not quantitative easing (QE), as the Treasury must still finance the buyback operations, nor does it require each operation to be fully duration-neutral. But the policy signal released by this move is extremely clear: officials are willing to use their toolbox more proactively to stabilize long-end interest rates. Privorotsky pointed out that regardless of whether the market calls it a "quasi-twist" or a "lightweight twist," the name is not important; what matters is the policy response function. He judges that the lasting impact of this policy on the US dollar and gold may be far greater than its impact on US Treasury yields themselves. **Because the underlying supply has not disappeared, interest rates may ultimately rise again; but if the market begins to believe that once long-end rates come under pressure, it will trigger more aggressive reverse repos or short-end issuance substitutes, then the systemic pressure accumulated in the bond market will inevitably migrate to other assets.** **The final result will manifest as a flattening yield curve and a weakening US dollar, and as this logic spills over into broad asset classes, it constitutes quite substantial benefits for stocks and gold.** ### Related Stocks - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [GLDW.US](https://longbridge.com/en/quote/GLDW.US.md) - [NVDY.US](https://longbridge.com/en/quote/NVDY.US.md) - [NVDU.US](https://longbridge.com/en/quote/NVDU.US.md) - [NVDQ.US](https://longbridge.com/en/quote/NVDQ.US.md) - [NVDD.US](https://longbridge.com/en/quote/NVDD.US.md) - [NVDL.US](https://longbridge.com/en/quote/NVDL.US.md) - [GLD.US](https://longbridge.com/en/quote/GLD.US.md) - [GLL.US](https://longbridge.com/en/quote/GLL.US.md) - [NVDS.US](https://longbridge.com/en/quote/NVDS.US.md) - [NVDX.US](https://longbridge.com/en/quote/NVDX.US.md) - [SGOL.US](https://longbridge.com/en/quote/SGOL.US.md) - [UUP.US](https://longbridge.com/en/quote/UUP.US.md) - [GLDM.US](https://longbridge.com/en/quote/GLDM.US.md) - [IAU.US](https://longbridge.com/en/quote/IAU.US.md) - [UGL.US](https://longbridge.com/en/quote/UGL.US.md) - [07788.HK](https://longbridge.com/en/quote/07788.HK.md) - [07388.HK](https://longbridge.com/en/quote/07388.HK.md) - [NVD.US](https://longbridge.com/en/quote/NVD.US.md) - [NVDB.US](https://longbridge.com/en/quote/NVDB.US.md) - [NVDG.US](https://longbridge.com/en/quote/NVDG.US.md) - [NVDO.US](https://longbridge.com/en/quote/NVDO.US.md) - [NVDW.US](https://longbridge.com/en/quote/NVDW.US.md) - [NVYY.US](https://longbridge.com/en/quote/NVYY.US.md) - [NYYY.US](https://longbridge.com/en/quote/NYYY.US.md) - [DIPS.US](https://longbridge.com/en/quote/DIPS.US.md) - [MAGX.US](https://longbridge.com/en/quote/MAGX.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [SOXQ.US](https://longbridge.com/en/quote/SOXQ.US.md) - [XSD.US](https://longbridge.com/en/quote/XSD.US.md) - [PSI.US](https://longbridge.com/en/quote/PSI.US.md) - [FTXL.US](https://longbridge.com/en/quote/FTXL.US.md) - [09388.HK](https://longbridge.com/en/quote/09388.HK.md) - [518850.CN](https://longbridge.com/en/quote/518850.CN.md) - [GOLD.AU](https://longbridge.com/en/quote/GOLD.AU.md) - [GS.US](https://longbridge.com/en/quote/GS.US.md) - [.DJI.US](https://longbridge.com/en/quote/.DJI.US.md) - [.NDX.US](https://longbridge.com/en/quote/.NDX.US.md) - [.VIX.US](https://longbridge.com/en/quote/.VIX.US.md) - [W4VR.SG](https://longbridge.com/en/quote/W4VR.SG.md) - [NVD.DE](https://longbridge.com/en/quote/NVD.DE.md) ## Related News & Research - [Nvidia to use Poolside deal to build alternative to Chinese AI, WSJ says](https://longbridge.com/en/news/296727449.md) - [Bitdeer Ai Targets 350Mw Ai Cloud Data Center Capacity By Q1 2028](https://longbridge.com/en/news/296362972.md) - [Nvidia Earnings: Wall Street Expects Growth to Slow in Q2 — Dan Niles Says Hyperscalers Are Spending Like Never Before](https://longbridge.com/en/news/296822352.md) - [Groq raises $350 million at a $3.5 billion valuation after Nvidia deal](https://longbridge.com/en/news/296132903.md) - [NVIDIA Corporation Denies Report on Launching China-Customized AI Chip Before Year-End](https://longbridge.com/en/news/296549715.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**