Earlier this month, American retail investors, known as Seohakgaemi (Korean investors trading U.S. stocks), made a significant shift in their investment strategy. After selling off large amounts of semiconductor 3x leveraged exchange-traded funds (ETFs) in the U.S. stock market, they’ve recently shown a strong buying trend, acquiring over 1.2 trillion KRW (about 866 million USD) worth in just one week. This change is attributed to growing optimism about the semiconductor industry and opportunistic buying following recent price corrections.
Data from the Korea Securities Depository’s Saveuro portal reveals that from August 18 to 24, domestic investors purchased 891.15 million USD of the Direxion Daily Semiconductor Bull 3x ETF (SOXL), which tracks the Philadelphia Semiconductor Index at triple leverage. This represents the highest net purchase during that period.
The SOXL purchases significantly outpaced the combined net purchases of stocks ranked 2nd through 20th, which totaled 811.02 million USD. This marks a dramatic reversal from early August when investors sold off approximately 1.77343 billion USD of SOXL between August 1 and 17.
Consequently, Korean investors’ SOXL holdings reached a valuation of about 6.05224 billion USD as of August 21, ranking fourth behind Tesla, NVIDIA, and Alphabet. This represents a substantial climb from its tenth place position at the end of April.
While concerns about peak artificial intelligence (AI) demand had previously cast doubt on semiconductor stocks, recent expansions in AI infrastructure investments have reinvigorated the sector. Anticipation is building for NVIDIA’s upcoming earnings announcement on August 26, further boosting semiconductor sentiment.
The week of August 18-24 saw strong interest across the semiconductor sector. SanDisk ranked second in net purchases at 109.4 million USD, while the Roundhill Memory ETF (DRAM) came in third at 84.12 million USD. Broadcom also attracted buyers, ranking eighth with 45.03 million USD in net purchases.
Market analysts suggest that recent corrections in semiconductor stocks, viewed by some as excessive, have created attractive buying opportunities. Despite a 9.5% drop in the Philadelphia Semiconductor Index from 12,621.01 to 11,423.17 between August 17 and 24, SOXL saw net purchases of 712.91 million USD, indicating substantial investor interest.
NVIDIA’s earnings report on Wednesday is widely anticipated as a potential turning point for semiconductor stocks. The company’s recent 15% price hike on AI servers will be closely watched for its impact on revenue and profit margins.
NVIDIA’s performance is seen as a bellwether not just for the company, but for the entire AI investment landscape among global tech giants. The results could significantly influence short-term market trends beyond just the semiconductor sector.
Jo Jae-woon, an analyst at Daishin Securities, emphasizes that the key factor this quarter isn’t whether NVIDIA beats consensus estimates, but by how much. He suggests that if revenue exceeds 93 billion USD and the outlook surpasses market expectations, it could test the upper limits projected by options markets.
