SOXL draws more than $7 billion despite losing about a third of its value
Key Facts
The SOXL semiconductor fund attracted inflows exceeding $7 billion in the week preceding a report published by Investing.com on October 19, 2026, marking its largest inflow on record. The money arrived as the fund lost about a third of its value during the same week amid a selloff in chip stocks, according to the website. The inflow went into the Direxion Daily Semiconductor Bull leveraged fund, which trades under the ticker SOXL, according to its manager's description. Investing.com described the money it attracted as "the fund's largest inflow on record," compared with its previous history. Its record weekly inflow thus coincided with a sharp decline in the value of an investment in the fund over the same period.
Direxion's prices showed that the fund closed trading on October 16, 2026, at $93.67, down 12.74% for the session, a daily decline within the week of losses. Across the sector, Reuters reported that the Philadelphia Semiconductor Index lost more than 11% in the week preceding its report published on October 19. The selloff thus extended to the sector index, alongside the leveraged fund's loss over the same weekly period. Earlier EL7 coverage had addressed the chip index's decline over 8 consecutive sessions amid concerns about artificial intelligence financing. During trading on Monday, October 19, the Philadelphia index rose 2.4%, according to an intraday Reuters update, rebounding after the weekly selloff.
SOXL seeks daily investment results equal to 300% of the daily performance of the NYSE Semiconductor Index, before fees and expenses, according to its prospectus filed with the U.S. Securities and Exchange Commission. The leverage objective applies to a single trading day, the horizon the prospectus specifies for measuring the fund's targeted investment result against the index. Longer holding periods increase the effect of compounding on investors' returns, according to a warning in the same document. The prospectus also identifies higher index volatility and leverage as factors that increase the effect of compounding on returns during the holding period. It states that "longer holding periods, higher index volatility and leverage increase the impact of compounding on an investor's returns," identifying risks associated with the product's daily nature.
On industrial investment, Taiwan Semiconductor Manufacturing Co. reaffirmed its capital expenditure budget range during its earnings conference call on October 15, 2026. The company maintained its annual budget within a range of $60 billion to $64 billion, according to the published transcript of the call. It said: "We reaffirm that our capital budget for the full year 2026 is between $60 billion and $64 billion." The range covers spending for the full year, while the sector's share-price decline and the fund's inflows were measured over the week preceding the Investing.com and Reuters reports. The company maintained its budget against a backdrop of continued industrial investment in chips despite stock-price turbulence, with its reaffirmed spending range remaining in place.
On chipmaking equipment, Reuters on October 14 reported comments from ASML about customer interest in placing orders extending into future years. The company said there was "already strong interest in placing orders for 2029, and sometimes even for 2030." The comment addressed customers' interest in placing equipment orders for those time horizons, signalling that long-term expansion plans within the industry were continuing. The horizon for some potential orders discussed by the company extends beyond the year covered by Taiwan Semiconductor Manufacturing Co.'s confirmed capital budget. Both companies' comments came during October, coinciding with turmoil in chip stocks that affected the sector index and the leveraged fund.
Attention now turns to earnings from technology giants and cloud computing operators, which Reuters identified as the next test for the AI trade. The focus is on whether earnings growth can counter concerns about valuations, debt and interest rates, according to the agency. Reuters said that "earnings from technology giants and cloud computing operators could be the next test," following the selloff in chip stocks. On the near-term earnings calendar, Lam Research will hold its September-quarter earnings conference call on Wednesday, October 21, 2026, according to its investor relations website. The call starts at 2:00 p.m. Pacific Daylight Time, providing a near-term date for tracking earnings from companies in the chip industry.