I Just Bet $100,000 on These Crashed AI Stocks

Wall Street's wonder boy just blew up his fund. Leopold Aschenbrenner's situational awareness hedge fund, you ready for this? Was up 439% this year. Not since inception, this year through the end of June. And he just lost it all. Wednesday night he sold his entire book to Citadel. It was worth 20 to 25 billion dollars in assets at the peak. And he was leveraged as high as 4 to 1. On Tuesday alone, his portfolio lost about 600 million dollars in a single session. Goldman Sachs, JP Morgan and Bank of America as prime brokers, the banks that lent him the money, spent the week making margin calls and walking him to the exit. And here's the heartbreaking part. On July 24th, 1 week ago, he wrote to his investors and he called this sell-off, quote, one of the best buying opportunities since early 2025. Maybe he was right, but he didn't get to find out. Now, if you've been staring at your account this month wondering what on earth happened to your stocks, take a look at this. This is Goldman Sachs's high beta momentum basket. So, this is their in-house index of leading stocks. And the graphic here shows this basket's performance every month going back to 1999. Look at the bar on the far right. That's July, down 37%. It was the single worst month for momentum stocks ever recorded, ever. Worse than 2009, worse than 2000.com crash. And what happened was several forces were hit at the same time. And the forced liquidation at Leopold's fund was a big contributor. So, if your portfolio took a hit this month, this is why. Now, today I'm going to show you exactly what happened, how 4 to 1 leverage turned the best hedge fund on Wall Street into a forced seller in 9 days. I'm going to show you why your portfolio got dragged into it when nothing was wrong with the companies you own. And I'm going to show you the $100,000 bet I made with my money across 10 of these stocks this morning. And the bet I made is simple. I believe that this group of stocks got liquidated, not devalued, big difference. The sell-offs we saw in July were exaggerated. And this might be my last chance to buy them at 50% off. So, stick around and I'll show you every stock I bought. And make sure to subscribe to the channel because this is what I started this channel to do, to show you how the actual market works underneath the headline. So, let's get into it. Now, if you don't know the name, O'Shaughnessy Asset Management is a former early employee at OpenAI who left to start a hedge fund built around one idea. That artificial intelligence is going to be bigger and faster than Wall Street has priced in. He was right. He was spectacularly right, up over 1,000% since he launched. This one of the best runs on Wall Street of all time, and the media has been calling him the next Warren Buffett. So, how does that guy blow up his entire multi-billion dollar fund in a week? One word, folks, leverage. Now, leverage just means borrowed money. So, if you have a dollar and you borrow three, you now control $4 of stock with $1 of your own, right? It's four to one leverage. And on the way up, it's the greatest thing in the world. The stock goes up 25%, you don't make 25%, you make 100%. You doubled your money on a 25% move. That's how you get 439% returns in 6 months. But, it cuts both ways. Losses get amplified, too. That same stock falls 25% and your whole dollar is gone, all of it. Not down 25%, gone. And you still owe the bank the $3 you borrowed. And you don't get to wait for it to come back because as soon as your money is gone, the bank calls and asks for more. It's called a margin call. And if you can't post it, they sell your stock today at whatever the current price is. And this forced liquidation only makes the situation worse. It adds more selling into stocks that are already going down. And that, in a nutshell, is what happened. It wasn't a bad earnings report. It wasn't a canceled order. It was a phone call from a risk desk. Wall Street Cowboys who were levered to the hilt in Sandisk, Corweave, Bloom Energy lost it all. Semiconductor stocks, folks, ran 130% over 12 months. Hit an all-time high in June. Everything was working. Aushin Barenar's up fivefold on billions of dollars in 6 months. Then two things landed on top of each other. First, a rumor that Nvidia's next server architecture was slipping and a fear that the memory shortage was starting to ease. That's it. One rumor, one fear. No earnings misses, no guidance cuts. But when the whole street is crowded into the same trade with borrowed money, a rumor's all it takes. Goldman's momentum basket fell 18% in two sessions. The steepest two days since the COVID crash. $3.3 trillion was wiped out from global chip stock. Aushin Barenar's book was sitting right in the middle of it. Bloom Energy is largest disclosed position. Nebias reported at roughly 40% of the fund's capital. IREN, Corweave, Share AI that the Neo Cloud company, which he owns 20% of the entire business. That would went from $175 a share down to $45. And as if that wasn't bad enough, the short side of his book went against him at the same time. He was short, he was betting against the software names like Adobe. And those went up while the stocks he owned went down. He lost on both sides. Thursday morning, David Faber reported it on CNBC. By the afternoon, the Journal and Bloomberg confirmed the buyer. Citadel bought the bulk of the book. Now, nobody has disclosed exactly what Citadel paid, but I can tell you this, it wasn't much. His broker forced him to unload his whole book. Every stock, every option, every single investment in one block. He had no choice. Not exactly a strong place to negotiate from. And Citadel was the only shop in the room with a checkbook big enough to buy it all. He took what they offered. And once he paid the margin debt back, I'd be surprised if there's anything left. Completely wiped out in a few weeks without so much as a bad earnings report. Now, by the way, that $5 Black Ops special is still going on. So, if you enjoy this type of content, if you want to see more about the stocks I'm buying, the leading areas of the market, where to get in, where to get out, you need to join my Black Ops trading service. It's five bucks for the whole year. That's it. And that's going to get you a live 1-hour mentoring session with me every single week. I'll answer your questions. I'll look at your stocks. I'll show you what's leading the market. Plus indicators, bonus reports, a ton of other stuff, too. All wrapped up just five bucks. So, click the link in the description, scan the QR code, or just go to tradewithross.com to get signed up. Now, here's the part I want you to hear. You aren't an investor in his fund. But many of you watching this video owned the stocks that were in his book. You were collateral damage. Because when a forced seller has to dump 20 billion dollars of stock, actually more cuz he was leveraged, he doesn't sell the stuff nobody wants. He doesn't sell the trash. He can't. He sells what is liquid. The crowded, everybody owns it names. Which means the selling lands hardest on the best performing stocks of the year. Look at what that did to the leaderboard. SanDisk was the number one stock in the entire S&P 500 for the first half of the year. Up 858% and it gave back half of that in about a month. Every name on this list is the same story. Samsung reported 1,800% profit growth and the stock fell 7% on the day. 1,800% and it went down. Folks, that is not a market pricing in bad news. That is a market with a seller in it who doesn't care what the news is. Someone taking advantage of this good news and using it as an opportunity to dump their stock. It wasn't the fundamentals, it was just like the plumbing. Do you see why I always talk about supply and demand? That's what moves prices. And this was an enormous amount of supply being forced on the market. And by Thursday morning it was over. The seller was gone and folks, look what happened. Nvidia's up 29%, its biggest single day of the year. Bloom Energy jumped 27%. Core Weave 24, SanDisk 22, Micron, all in one session. All of this before lunch. And it wasn't just relief. Two real things landed on the same day. Samsung, they warned that memory shortages could re-emerge and demand keeps strengthening. The exact opposite of the oversupply fear that started this thing. And then Microsoft reported Azure above a $100 billion, which tells you demand for all this compute is not slowing down. In an ironic twist, the story that knocked these stocks down 30, 40 50% got contradicted by the companies themselves. On the same day the forced seller stopped selling. So, Thursday morning, I started buying. I put $100,000 to work betting that what we saw in July was forced selling, not repricing. I put $10,000 each into 10 names. And here are the stocks. Bloom Energy, Nvidia's, Core Weave, Coherent, Lumentum, Marvell, SanDisk, Micron, Western Digital and Sharon AI. These are both the largest known holdings of Loophold's hedge fund along with a few other names that experienced the same correction from the same forces for the same reason. Every one of those got sold because somebody else needed cash, not because the businesses got worse. So, my thinking on this, when a stock falls because the company broke, right, the earnings are down, they missed expectations, you wait for the company to fix itself, for the numbers to improve. That takes quarters, sometimes years. But when a stock falls because a leverage fund had to liquidate it into a Tuesday afternoon, the thing that was wrong is over the moment the last share clears, which means the low with all likelihood is behind us. The seller is gone. The demand is still there, and these names are trading well below where they were five or six weeks ago on better information than they had then. Now, I'm not telling you to do the same thing. You do what you want, but I want to own this group going into August. It is a risk, but I'm going in to see if the recovery I'm expecting plays out. And these are exciting stocks. I want you to understand why they move like this, cuz it's the whole reason the opportunity exists. Almost every name on that list is priced off of future profits, not current ones. Right, they're pricing in expectations of the future. Share and AI, for example, is trading between a dollar ninety and a hundred and seventy-eight bucks in the last year. It carries a beta above six. I mean, it moves roughly six times as hard as the S&P in either direction. Why so volatile? Well, because when almost all of a company's value sits in what it expects to earn five years from now, every change in the mood about those five years moves the stock today. Push the forecast out a year, the stock drops 40%. Pull it in a year, it doubles. Nothing about the business changed, just the calendar in everybody's head. And look, I like momentum. I like movement. I want stocks that have proven they can do this, that they they have ran a hundred, two hundred, eight hundred percent before. And then most of them just got cut in half. Which means even a return to where they were trading in June would be 100% gain. Now, if you are sitting on losses in these names right now and you're feeling kind of crummy about it, don't. This stuff happens. The best performing hedge fund manager on Wall Street, a guy with a direct line to the AI industry, got taken out of the exact same stocks. He lost probably everything. So, July was not just about you or me or anyone else being a bad stock picker. It was about too much leverage with too much money in stocks that were already up five and 10-fold. Folks, don't forget to subscribe to the channel and don't forget to join my Black Ops trading service. Join me live this Monday 9:00 a.m. Eastern time. We'll go for an hour and every Monday for the next year, all for five bucks plus my weekly newsletter delivered to your inbox, bonus reports, access to my team, tons of stuff. We made it easy. You can scan that QR code in the corner, click the link in the description, or just go to our link tradewithross.com to get signed up today. And I promise it will be the best $5 you ever spent. I'll see you in the next video.