Short-term traders are proving eager to bet on a rapid recovery in Nvidia , pouring money into the three largest leveraged exchange-traded funds which are linked to gains in the share price of the AI chipmaking giant.

Single-stock ETFs betting heavily on Nvidia's blistering rally plunged overnight after tracking losses logged by the chip darling.

Global investors dumped tech stocks on Monday, worried that the emergence of a low-cost Chinese artificial intelligence model would threaten the dominance of leaders like Nvidia, evaporating $593 billion of the chipmaker's market value.

One of the biggest beneficiaries of this trend is Nvidia (NASDAQ: NVDA), which pioneered the graphics processing units (GPUs) that have become the gold standard for running AI systems. However, reports emerged recently that suggested a Chinese start-up had cracked the code for developing strong AI systems while using inferior chips and novel training processes.

Since the start of 2023, Nvidia's (NASDAQ: NVDA) stock has gained an astronomical 906% as of the time of writing. While this is common investor thinking, it's caused many (including myself) to miss a large chunk of Nvidia's rise.