--- title: "AI crowded trading welcomes a major clearing! Tech giants split and differentiate, funds bloodbath in semiconductors rush into \"value safe havens\"" type: "News" locale: "en" url: "https://longbridge.com/en/news/294171528.md" description: "AI crowded trading encounters a major liquidation, with investors eager to reduce exposure to chip and AI concept stocks and rebalance their portfolios. UBS data shows that related stocks have significantly underperformed, while Goldman Sachs believes that momentum collapse has entered the latter half. ASML is accused of overreacting to news of competition from China, as its EUV equipment remains irreplaceable in AI chip manufacturing" datetime: "2026-07-29T08:09:48.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294171528.md) - [en](https://longbridge.com/en/news/294171528.md) - [zh-HK](https://longbridge.com/zh-HK/news/294171528.md) --- # AI crowded trading welcomes a major clearing! Tech giants split and differentiate, funds bloodbath in semiconductors rush into "value safe havens" The Zhitong Finance APP noticed that after a rush into chip stocks and so-called "AI winners," investors are now eager to cut back on such exposures and rebalance their portfolios. Even considering this, the recent accelerated sell-off due to competitive risks from China still seems premature. The reversal in AI trading this month has been quite dramatic. A basket of stocks linked to AI spending (including semiconductors) tracked by UBS has underperformed a basket of stocks seen as facing risks of AI disruption by a record 42 percentage points. Although this dramatic reversal occurred after months of outperformance, it reflects a sudden unwinding of excessive positions, particularly within the chip sector. ![image.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260729/1785311279974296.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Extreme volatility in AI trading In terms of investment factors, momentum trading continues to perform poorly. The backdrop of "spot prices rising and volatility rising" is no longer in place, with volatility still climbing to levels seen during the COVID-19 pandemic, while prices are plummeting. Given that momentum was one of the most crowded trades and has now given back all gains since February, a bottom may be near. Brian Garrett, the head of equity execution at Goldman Sachs, stated that his team continues to believe that "the momentum collapse has entered its later stages." The Goldman team believes that given the high correlation between AI and momentum trading, increasing exposure is reasonable, while noting that the actual volatility of momentum pairs remains "astonishingly high." As for ASML, the recent drop triggered by a report about state-owned enterprises in China beginning to manufacture immersion deep ultraviolet (DUV) lithography equipment is likely an overreaction. First, DUV equipment is commonly referred to as the "main model" in the semiconductor industry, and its advancement is inferior to the precision extreme ultraviolet (EUV) lithography equipment that is essential for ASML's large-scale manufacturing of key AI chips. Industry research analyst Masahiro Wakasugi pointed out that although ASML's sales and operating profits face a threat of being impacted by 20%, this still seems far off. Wakasugi wrote in his report, "China has a precedent of nearly 100% localization in strategic chip manufacturing, and if costs are unconstrained, domestic suppliers may be able to produce immersion DUV equipment," adding, "However, it may still take about 7 to 10 years to completely close the technological gap with ASML." ![image.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260729/1785311222387516.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) This is not a cleanup of excessive positions that triggers widespread market sell-offs, but rather a rotation and rebalancing of portfolios that have become overly reliant on a single trade. In fact, the value factor has become the main beneficiary of this round of rotation. Even within the tech sector and among major stocks, investors have turned to value stocks Bank of America derivatives strategists, including Arjun Goyal and Vittoria Volta, stated, "The tech pullback has once again manifested as a rotation rather than indiscriminate selling, with sectors like healthcare and finance clearly outperforming." They added, "Therefore, despite the pullback, correlation levels remain extremely low, even within the 'seven giants'—Apple, with a lower AI exposure and more 'value attributes,' has risen, while recent winners like Alphabet Inc. and Nvidia have declined." The strategists further noted that the rise in tech stocks remains a core trend in the medium to long term. However, the Bank of America team indicated that the risks of momentum trading liquidation extending further, given the presence of catalysts such as major earnings reports and Federal Reserve interest rate decisions, "prompt investors to 'rent' rather than 'hold' the rebound through the asymmetry of options." They recommended a call spread strategy on the semiconductor ETF (SMH), which provides an attractive and limited-risk way to position for a semiconductor rebound while locking in downside risk exposure. ![image.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260729/1785311239606668.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Market attention is about to shift to the performance and guidance of tech giants. Microsoft and Meta will announce their earnings after the market today, followed by Apple and Amazon tomorrow. Earnings expectations have been significantly raised, but companies are still exceeding expectations by a large margin. Among the S&P 500 constituents that have reported earnings so far, 85% have delivered positive surprises, the highest proportion tracked by Bloomberg Industry Research in five years. Nevertheless, this has not propelled the market higher. ![image.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260729/1785311255950617.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Daniela Hathorn, senior market analyst at Capital.com, stated, "Investors are becoming increasingly picky this earnings season; strong revenue growth is no longer enough to satisfy the market unless accompanied by evidence that high spending is translating into sustainable profitability." 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