Direxion Daily Semiconductors Bear 3x Shares (SOXS) surged 7.55% intraday on Tuesday, as the leveraged exchange-traded fund that delivers three times the inverse daily performance of semiconductor stocks benefited from a broad selloff in the chip sector.
The sharp rise in the bearish ETF came as chip and storage shares fell across the board. Market reports indicated that semiconductor-related stocks including the Direxion Daily Semiconductor Bull 3x Shares (SOXL), Qualcomm, and Broadcom were down about 3%, while Seagate Technology, Western Digital, and SMCI declined over 2%. Memory chip stocks Micron and SanDisk also moved lower, extending a recent selloff in AI memory stocks.
The downturn reflects growing investor concerns about semiconductor stock valuations and future market dynamics. According to Seaport Research, following a parabolic surge, semiconductor stocks have advanced beyond their fundamental valuations, suggesting the uptrend may be unsustainable. Furthermore, industry experts have warned that memory prices could drop next year or in early 2028 as Chinese companies aggressively expand production capacity, potentially shifting the market from the current shortage to an oversupply situation.
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