New York, June 2, 2026 – The Direxion Daily Semiconductor Bull 3X ETF (SOXL) surged approximately 12.4% to $255.23 in late morning trading Tuesday, while its bearish counterpart, the Direxion Daily Semiconductor Bear 3X ETF (SOXS), dropped 12.5% to $5.475. The moves came as chip stocks rallied sharply, driven by gains in Nvidia and Marvell Technology amid continued demand for AI infrastructure. The iShares Semiconductor ETF (SOXX), a widely used benchmark, rose about 4.2%.
The activity reflects a surge in retail and analyst attention on leveraged semiconductor funds, particularly SOXL's staggering 1,150% gain over the past year. A recent analysis by DM Martins Research on Seeking Alpha highlighted that disciplined tactical trading in and out of SOXL could build wealth over the long term, calling the ETF a tool for trading bubbles rather than a traditional long-term hold. According to a 24/7 Wall St. report, SOXL turned $100,000 into approximately $1.28 million over the year ending May 27, 2026, riding a massive rally in chip stocks fueled by AI infrastructure demand.
AI Demand Drives Chip Rally
The Philadelphia SE Semiconductor Index gained 3% Tuesday, led by a surge in Marvell Technology. Marvell shares jumped about 25% to $274.66, pushing its market cap close to $246 billion, after Nvidia CEO Jensen Huang called Marvell the next “trillion dollar company” during Computex in Taipei. Nvidia invested $2 billion in Marvell earlier this year for custom AI chips, networking equipment, and central processors. Nvidia itself remains the anchor for the market, with CEO Jensen Huang stating Tuesday that the company has secured enough supply to support “very robust growth” in CPUs and GPUs, though supply remains tight.
“The day’s AI-related news confirms the insatiable demand” for the semiconductor group, said Ryan Detrick, chief market strategist at Carson Group, in a Reuters report.
Leverage and Risk
Direxion states that SOXL targets 300% of the daily move in the NYSE Semiconductor Index before fees and expenses, while SOXS aims for 300% of the inverse daily move. However, the firm explicitly warns that these ETFs are designed for one-day use only, and investors should not expect triple or inverse triple the index's return if held longer. The daily-reset mechanism means that returns can diverge significantly from the underlying index over extended periods, amplifying both gains and losses.
Retail traders are not acting as a unified group. In a Moomoo community post tied to SOXS from a day earlier, one user wrote, “Alright im in!”, suggesting some are still betting on a reversal even as the bearish ETF dropped Tuesday. SOXL traded over 20 million shares by late morning, while SOXS volume crossed 200 million shares, as investors bought and sold both to take different sides on the AI-chip move.
Macro Risks Loom
While chip stocks could continue climbing, and daily leverage might boost gains if the trend is steady, the strategy carries significant risks. A sideways market, a sharp single-day decline, or fading AI chip demand—particularly if Nvidia's outlook weakens—could quickly erode returns. Direxion emphasizes that its leveraged and inverse ETFs carry more risk than non-leveraged funds. Macroeconomic risks are also in play; Reuters noted that investors are watching whether inflation and potential rate hikes could hurt the U.S. stock rally. Broadcom's upcoming results could test the AI trade after the Philadelphia semiconductor index surged about 80% off its March 30 low. Rising bond yields can weigh on growth stocks by pushing up borrowing costs and making equities less appealing compared to bonds.
For now, traders continue to favor exposure over patience, with heavy two-sided volume in both SOXL and SOXS reflecting the high-stakes, momentum-driven nature of the leveraged semiconductor trade.
