There’s a new king in chip ETFs after record $805 million inflow

(Bloomberg) — With the artificial intelligence hype sweeping Wall Street, a massive influx has transformed a popular ETF tracking chipmaker into the biggest in its class.

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The iShares Semiconductor exchange-traded fund (ticker SOXX) saw an inflow of nearly $805 million on Thursday, the most for a session dating back to at least 2001, according to data compiled by Bloomberg. The contribution places the fund as the largest in the chip space, with $8.8 billion in assets, according to Bloomberg Intelligence, just ahead of the VanEck Semiconductor ETF (SMH), with $8.7 billion.

“SOXX can be a pretty decent AI game thanks to its big NVDA weight,” BI analyst Athanasios Psarofagis said, referring to Nvidia Corp., which hit a record high this week. He added that SOXX had its second highest trading day ever on Thursday.

The Philadelphia Semiconductor Index of 30 chipmakers soared 13% in two days. A slew of ETFs exposed to Nvidia and Marvell Technology Inc. also got a boost this week after the companies reported stronger earnings from their work with AI.

ETF Global X Robotics & Artificial Intelligence (BOTZ), with Nvidia’s net weighting of nearly 12%, is poised to rebound 3% this week, while ETF VanEck Video Gaming and eSports (ESPO) is on track to add 1.9%. At the other end, Marvell makes up more than 5% of the Defiance Next Gen Connectivity (FIVG) ETF, and that fund is up 4% in five days.

Meanwhile, the GraniteShares 1.5x Long NVDL Daily (NVDL) ETF, which tracks Nvidia’s daily performance 1.5x, jumped 36% this week in higher than usual volume for its best streak. weekly since its inception.

Nvidia forecast sales this week that beat analysts’ estimates, citing demand for AI processors. Sales in the three months ending July will be around $11 billion, the company said, well above analysts’ average estimate of $7.2 billion. Marvell, meanwhile, jumped after saying he expected the hyped growth engine’s revenue to soar this year.

Investors have focused on AI trends, especially since the launch of OpenAI Inc.’s ChatGPT last year. And it could also be a boost for the ETF space – BI projects that AI-related funds could see their assets triple to $35 billion by 2030.

Meanwhile, it’s also been all the talk at industry conferences – it was a key focus for ETF managers at the recent Inside ETFs conference in Hollywood, Florida.

“Thematic ETFs representing the future of technology, machine learning and AI are certainly experiencing their renaissance,” said Sylvia Jablonski, managing director of Defiance ETFs.

–With the help of Isabelle Lee.

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