Chip stocks plummet, evaporating trillions of dollars, but leveraged ETF attracts record amounts of capital inflow
The Block
55m ago
Ai Focus
As the market value of the chip industry evaporates by $1 trillion, ETF investors are instead increasing their positions against the trend. VanEck semiconductor funds and SOXL with triple leverage have both seen strong inflows of capital, indicating that investors are still using semiconductors for tactical trading.
Helpful
No.Help

From October 20th to 22nd, along the Huangpu River in Shanghai, the 2026 Sustainable Global Leaders Conference will once again take place. Nobel laureates and Turing Award winners will share their insights on the future and trends of technology. There will also be a live dialogue between internet-famous professors who offer solutions to anxiety and the era of involution: McFarlane and Xiang Biao! Spaces are limited, so act quickly before they run out. Let's join together for this sustainable event! [Click to register]

As the market value of the chip industry evaporates by $1 trillion, ETF investors are making large purchases during this wave of selling. A fund that triples investors' daily exposure to this industry is set to record a record level of capital inflows this week.

Data shows that the $72 billion VanEck semiconductor fund (code SMH) has attracted over $430 million in capital inflows over the past three trading days, and this week's capital inflows are expected to reach their highest level since early September. Some investors are even more bold, investing approximately $3.8 billion daily in the triple-leveraged Direxion daily semiconductor triple long ETF ( SOXL ), despite the fund's market value having fallen by nearly 21% this week. Such a scale of capital inflows is sufficient for this $19 billion fund to set a new record for weekly capital inflows.

However, the overall environment is far from reassuring: As investors' concerns about spending on artificial intelligence and intensifying global competition continue to exert pressure, the Philadelphia Semiconductor Index has fallen by 12% over the past six trading days, with the market value of its constituent stocks shrinking by approximately $1 trillion. Concerns about overly high valuations and rising interest rates have also exacerbated the volatility in this sector.

VettaFi, the head of industry and sector research, stated that the recent sell-offs are "identical to several declines that occurred earlier this year."

Islam said, "Although the long-term demand prospects remain strong, semiconductors ETF have increasingly become a popular tool for tactical trading. Investors buy in when the market is weak and take profits during periods of upward movement."

This has always been a popular strategy, especially among retail investors. Whenever the market is under pressure, they tend to buy on dips instinctively, betting that the market will rebound as it has done several times before this year. Investors who have held onto their positions throughout the year have also reaped substantial returns: The VanEck Semiconductor Fund has risen by 57% this year, the Direxion Daily Semiconductor 3x Long Fund has increased by 300%, and the ETF Fund has soared by 163%.

Baird Strategas Chief ETF Strategist Todd Sohn stated: "The pullback trend in semiconductor stocks has accelerated again, but this has not yet truly curbed investors' desire to buy on dips using leverage."

Tip
$0
Like
0
Save
0
Views 34
HKWDB reminds readers to view blockchain rationally, stay aware of risks, and beware of virtual token issuance and speculation. All content on this site represents market information or related viewpoints only and does not constitute any form of investment advice. If you find sensitive content, please click“Report”,and we will handle it promptly。
Submit
Comment 0
Hot
Latest
No comments yet. Be the first!
Related
The Wall Street Journal: A company affiliated with a former White House crypto advisor benefited from the "GENIUS Act"
According to The Wall Street Journal, Bo Haynes, who served as an encryption advisor to former U.S. President Donald Trump and later joined Tether, still held a one-third stake in the investment company Nxum that he co-founded during his tenure at the White House. During the promotion of the GENIUS Act, the company received the first payment of $6.3 million from a transaction with Tether. The report also states that Haynes used Signal to update his partners on the progress of the bill. Tether has not immediately responded to these allegations.
Cointelegraph
·2026-10-16 01:35:28
9
PredictArena Introduces Predictive Markets into the Creator Economy
PredictArena Inc officially launches, and establishes an introduction brokerage relationship with Crypto.com | Derivatives North America (CDNA). This platform is aimed at the creator economy, allowing creators to post predictions, interact with their audience, and engage in market activities around the topics they follow.
PR Newswire
·2026-10-16 01:16:44
9
The Muse of Meta may change investors' views on the capital expenditures of AI
In this financial reporting quarter, Meta's proxy AI product Muse may allow investors to have fewer complaints about the AI capital expenditures of large tech companies. Some investors believe that Muse shows that these investments are not "going down the drain"; others remind that Meta still needs to prove how to turn Muse into cash.
Businessinsider
·2026-10-16 01:08:07
17
Apple's market value closes above $5 trillion for the first time; The market value of AI giants evaporates by tens of billions of dollars
On October 14, Apple's market value closed at over $5 trillion for the first time, setting a new record against the backdrop of a general decline in tech stocks; meanwhile, AI infrastructure-related stocks tumbled significantly, prompting the market to re-evaluate the debt-driven AI expansion costs.
Coinpaper
·2026-10-16 01:08:04
21
CoreWeave Credit Default Swaps Rise to Stress Levels; Investors' Worries about AI Debt Intensify
The credit pressure of CoreWeave continued to deteriorate on Thursday, with the 5-year credit default swap rate briefly rising above 1140 basis points, reflecting market concerns about AI-related debt and excessive spending. At the same time, the stock price of CoreWeave and other AI-related stocks also came under pressure. Analysts say that such concerns could evolve into a self-fulfilling prophecy.
CNBC
·2026-10-16 01:08:01
18
View More