Sunday, June 23, 2024

Record $805 million flows into SOXX ETF after Nvidia


With the artificial-intelligence hype on Wall Street, a massive inflow turned a popular ETF-tracking chipmaker into the biggest of its category.

The iShares Semiconductor exchange-traded fund (ticker SOXX) saw inflows of nearly $805 million on Thursday, the most for a single session dating back to at least 2001, data compiled by Bloomberg show. Intake makes the fund the largest in the chip space with $8.8 billion in assets, according to Bloomberg Intelligence, just ahead of the VanEck Semiconductor ETF (SMH) with $8.7 billion.

“SOXX could be a very good AI play thanks to its big NVDA weight,” said BI analyst Athanasios Sarofagis, referring to Nvidia Corp. He added that SOXX saw its second biggest trading day on Thursday.

The Philadelphia Semiconductor Index of 30 Chipmakers is up 13% in two days. A bevy of ETFs with exposure to Nvidia and Marvell Technology Inc. also got a boost this week after the companies reported strong earnings fueled by their work with AI.

The Global X Robotics & Artificial Intelligence ETF (BOTZ), with a nearly 12% net Nvidia weighting, is on pace for a 3% rally this week, while the VanEck Video Gaming & Esports ETF (ESPO) is on track to add 1.9%. , Marvell, on the other hand, contributes more than 5% to the Defense Next Gen Connectivity ETF (FIVG), and that fund has gained 4% over a five-day stretch.

Meanwhile, the GraniteShares 1.5x Long NVDL Daily ETF (NVDL), which tracks Nvidia’s 1.5x daily exposure, jumped 36% this week amid higher-than-usual volume for its best weekly stretch since its inception. Has gone.

nvidia this week Forecast Sales that blew away previous analysts’ estimates, citing demand for AI processors. Sales in the three months ending in July will be about $11 billion, the company said, above the average analyst estimate of $7.2 billion. Marvel, meanwhile, Enhanced It then said that trendy growth drivers are expected to drive revenue this year.

Investors have particularly focused on OpenAI Inc. last year. Since the launch of ChatGPT, we have been highly focused on AI trends. And it could be a boost for the ETF space as well – BI projects that artificial intelligence-linked funds could triple their assets to $35 billion by 2030.

Meanwhile, it’s also been a topic of discussion at industry conferences — it was a major focus for ETF managers at the recent Inside ETF conference in Hollywood, Florida.

“Thematic ETFs that represent the future of technology, machine learning and AI are definitely having their own renaissance,” said Sylvia Jablonski, chief executive officer of Defense ETFs.

-With assistance from Isabel Lee.