Goldman Sachs and JPMorgan warn that elevated hedge fund leverage and concentrated positions in AI and tech stocks could trigger a sharp selloff. JPMorgan estimates quarter-end rebalancing may drive up to $165 billion in equity sales, led by Japan's GPIF ($60bn) and US pension funds ($55bn). The warning comes as gross hedge fund leverage hits 294%, a five-year high, and net leverage reaches four-year highs. JPMorgan also notes stretched semiconductor positioning, with semiconductors' share of global equity value over six times their revenue share. The fragility extends to Bitcoin, which JPMorgan says has growing hashrate sensitivity to price, signaling miner stress. Bitcoin trades near $63,620, behaving more like a tech stock than a safe haven. The combination of forced selling, high leverage, and crowded AI bets could amplify cross-asset volatility into month-end.

Key facts

• Goldman Sachs and JPMorgan warn of leveraged positions amplifying any pullback.
• JPMorgan estimates up to $165B in equity sales from quarter-end rebalancing.
• Gross hedge fund leverage hits 294%, a five-year high; net leverage at four-year high.
• Semiconductors' global equity value share is over six times their revenue share.
• Bitcoin's hash rate sensitivity to price signals growing miner fragility.

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