Here's Why the Direxion Daily Semiconductor Bull 3X ETF Soared Today (Hint: It's Alphabet and Intel Related)
The bull-and-bear debate over AI and semiconductor spending continues, with the bulls coming out on top today, backed by some big news.
Here's Why the Direxion Daily Semiconductor Bull 3X ETF Soared Today (Hint: It's Alphabet and Intel Related)
Overview
The Direxion Daily Semiconductor Bull 3X ETF (NYSEMKT: SOXL) is an ETF that uses leverage to seek to generate 300% of the performance of the NYSE Semiconductor Index. As such, when the semiconductor index does well, you can expect an inordinate return from this ETF, and today's near 21% jump by 12 pm comes on a big day for the sector.
The move is a combination of a bounce-back following Friday's bloodbath and fundamental news supporting the thesis that we are merely in the early innings of a multi-year expansion in artificial intelligence (AI) related semiconductor spending.
Details
Most of the attention has focused on Nvidia (the largest holding in the ETF) and its graphics processing units (GPUs), which are ideal for the massive amounts of simultaneous computation required in AI. Intel (a top-10 holding in the ETF) management has been vocal about the growing importance of central processing units (CPUs) in enabling autonomous agents to perform AI functions. CPUs are Intel's core strength
Source
Originally published at www.fool.com.
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