Nvidia’s AI Surge Ignites Furious Rally in Leveraged ETFs—Here’s Why It Matters

Nvidia's blistering AI-driven performance isn't just moving markets—it's supercharging a gold rush into leveraged ETFs targeting artificial intelligence.

Why the frenzy? Leveraged ETFs amplify returns (and losses) using derivatives. When Nvidia—the AI chip giant—posts blowout earnings or announces breakthrough tech, these funds turbocharge bets on the sector’s momentum.

But caution lights are flashing. Leveraged ETFs reset daily, meaning long-term holders can get crushed by volatility decay—a feature Wall Street happily overlooks while collecting fees. One cynical take? It’s the latest way to repackage FOMO into a three-letter ticker.

For now, the AI trade keeps charging. Just remember: in leveraged ETFs, when the music stops, you don’t just lose a chair—you get billed for the broken furniture.

Investors are flooding into AI-themed ETFs

The numbers tell the story. Through merely eight months of 2025, asset managers have introduced 112 new leveraged and inverse ETFs linked to individual stocks. That’s nearly triple the 38 that launched in all of 2024.

All told, there are now 190 single-stock leveraged and inverse ETFs listed in the U.S. Over half are associated with companies trying to capitalize on the AI wave. Combined, these funds with AI exposure hold $17.7 billion of the $23.7 billion deployed in the leveraged ETF universe.

One of the stars in that crowd is the GraniteShares 2× Long NVDA Daily ETF. It has $4.56 billion in assets gathered in the 14 months since it opened in December 2022. Some other big names driving the creation of ETFs are Tesla, Palantir, and NuScale Power, companies directly or indirectly linked to AI.

An ETF analyst at Morningstar, Bryan Armor, said the ETFs allow traders to increase their daily bets, adding that the potential upside is enormous but the risks are equally high.

Nvidia earnings set tone for big market shake-up

These speculative products get tested every earnings season, but the one from Nvidia’s report may be the check to checkmate. Following the results, options traders are positioning for a $260 billion market-value swing. That is about a 6% MOVE in either direction.

Leveraged ETFs, those moves can magnify gains or magnify pain. The risks are not theoretical. Nvidia shares dropped 17% earlier this year on fears of new competition from a Chinese chip rival. That day, the GraniteShares 2× Nvidia ETF lost almost 34%.

But the upside can also be explosive. Last week, surprise earner MongoDB also pointed to AI demand. Its stock ROSE more than 23% in after-hours trading. The brand-new Tradr 2× Long MDB Daily ETF climbed 46% overnight.

ETF issuers are raking it in. Leveraged ETFs average fees of 0.96%, almost double the industry average of 0.54%. But investors are still plowing money into the platform, eager for exposure to AI names.

Matt Markiewicz, head of product and capital markets at Tradr ETFs, said demand for such products continues to climb. He noted that his firm had recently launched a leveraged ETF tied to Constellation Energy, on the expectation that power producers WOULD benefit as AI data centers consume more electricity. He added that there is currently a strong thirst among investors for companies that stand to profit from the AI boom.

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