Chip Stocks Lose $1 Trillion in Market Value, Investors Rush Into Semiconductor ETFs to Buy the Dip

Odaily: As chip stocks shed $1 trillion in market value, ETF investors are pouring billions of dollars into the decline, with one fund offering triple the daily exposure to the semiconductor sector on track for a record weekly inflow.

Data compiled shows that the $72 billion VanEck Semiconductor ETF attracted more than $430 million in inflows over the past three trading sessions, on pace for its largest weekly inflow since early September. Some investors are being even more aggressive: despite the triple-leveraged Direxion Daily Semiconductor Bull 3X ETF falling nearly 21% this week, roughly $3.8 billion has flowed in. For the $19 billion fund, that inflow is enough to set an all-time record for a single week.

However, the market backdrop is hardly encouraging. Amid persistent investor concerns over AI spending and intensifying global competition, the Philadelphia Semiconductor Index has fallen 12% over the past six trading sessions, wiping out about $1 trillion in market value. Worries over stretched valuations and rising interest rates have further exacerbated the sector's volatility. Todd Sohn, Chief ETF Strategist at Baird Strategas, said: "The pullback in semiconductor stocks has accelerated again, but it still hasn't truly dampened investors' demand to use leverage to buy the dip."