Goldman Warns of US Stock ‘Upside Crash’ as Tech Rally Retains Momentum

Goldman Sachs said US technology stocks have continued to climb on enthusiasm over artificial intelligence and semiconductors, repeatedly pushing the Nasdaq 100 to record highs. Crucially, investors have not reduced their demand for hedges as share prices rise. Instead, they are buying call options and volatility positions at the same time, creating what Goldman calls an “upside crash.”

The latest analysis shows an unusually positive correlation between the Nasdaq 100 and call-option prices compared with the past 10 years. Implied volatility would typically decline as stocks rise, but that has not happened during this rally. Goldman believes investors are using call options to chase gains in technology and semiconductor stocks, suggesting the upward momentum is not yet exhausted and the index has room to advance further.