Wall Street's Biggest Bubble (No, Not AI) Appears Ready to Burst

Margin debt has hit $1.5 trillion, up 77% in just 14 months, and that leverage buildup is the risk hiding beneath the AI-fueled rally in the Nasdaq-heavy ONEQ.

The Motley Fool piece argues this, not AI valuation, is Wall Street's largest bubble. Its case rests on history: rapid margin debt surges preceded the dot-com bubble burst in 2000, the financial crisis low in 2009, and the 2022 bear market. A 77% climb in 14 months fits that pattern of fast leverage expansion ahead of major drawdowns.

The mechanism, as the article frames it, is investor behavior. Record highs driven by AI enthusiasm have left the market overvalued, and if investors cut risk exposure, the decline could be significant. Borrowed money amplifies that selling, since leveraged positions can force liquidation when prices fall.

Interpretation: margin debt is a sentiment and positioning gauge, not a timing tool. The source does not say when a reversal might begin, only that prior surges ended badly. For a growth-weighted fund like ONEQ, concentrated AI exposure and rising leverage together raise sensitivity to any shift in risk appetite.