As chip stocks shed $1 trillion in market value, ETF investors are pouring billions into the selloff, putting a fund that triples their daily exposure to the sector on pace for record weekly inflows.
The $72 billion VanEck Semiconductor fund (ticker SMH) has absorbed more than $430 million in inflows over the past three sessions, which puts it on track for its best week since the start of September, according to data compiled by Bloomberg. Some investors have been even bolder, putting roughly $3.8 billion into the triple-levered Direxion Daily Semiconductor Bull 3X ETF (SOXL), even as it lost nearly 21% of its value this week. That haul is big enough to place the $19 billion fund on pace for its best ever week of inflows.
The backdrop is less than comforting: the Philadelphia Semiconductor Index has lost 12% over the past six sessions, forfeiting roughly $1 trillion in value, as investor concerns over AI spending and increased global competition continue to weigh. Worries over stretched valuations and higher interest rates have heightened volatility for the sector.
See more: AI ETFs: Beyond Chips & Hyperscalers
The recent selloff “echoes several earlier declines this year,” says Roxanna Islam, head of sector and industry research at VettaFi.
“While the long-term demand outlook remains strong, semiconductor ETFs have become increasingly popular vehicles for tactical trading, with investors buying into weakness and taking profits during rallies,” Islam added.
It’s been a popular gamble, particularly with retail investors who have been reflexively dip-buying during market stresses, betting that the market will make a comeback as it has other times this year. And for those who have been along for the ride all year, it’s paid off handsomely: VanEck Semiconductor is up 57% in 2026, while Direxion Daily Semiconductor Bull 3X has surged 163%.
“Semis corrective behavior is re-accelerating again, but that hasn’t quite put a lid on the demand for dip buying with leverage,” said Todd Sohn, chief ETF strategist at Baird Strategas.
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