tech
Some brave traders who made a leveraged bet on chip stocks nearly doubled their return in almost 10 days
Chipmakers have surged since the market’s lows on March 30 from the U.S.-Iran war. Those willing to take on major risk saw even bigger returns.
TL;DR
- The NYSE Semiconductor Index has risen 27% since March 30.
- The Direxion Daily Semiconductor Bull 3X Shares ETF (SOXL) has surged nearly 98% since March 30.
- Semiconductors have outperformed software by 20 percentage points in the last week, the largest five-day spread in over 25 years.
- Developments in artificial intelligence have aided the recent rally in chipmakers.
- Investors are concerned AI could disrupt the software-as-a-service business model, leading to a decline in software ETFs.
- Analysts expect the divergence between semiconductors and software to ease eventually but note the trend's momentum must be respected.