Chip Stocks Caught in Options Frenzy as Institutional Investors Exit

As institutional investors quietly withdraw $84.4 million from the iShares Semiconductor ETF (SOXX.US), retail traders are piling into high-risk call options on the fund, which holds significant stakes in Micron Technology (MU.US) and Nvidia (NVDA.US). The options market has become a battleground for momentum traders, with front-week expiry contracts showing severe near-term stress.

The divergence among prominent investors is clouding the fundamental path forward for these chip giants. Michael Burry flagged startup Etched as serious competition for Nvidia, citing its ability to bring inference test chips online via Taiwan Semiconductor (TSM.US) in just 44 days and its recruitment of top Nvidia engineering talent.

Cathie Wood counters that plunging token costs are outweighed by exploding intelligence and productivity volumes, creating a virtuous cycle still in its infancy. Arthur Hayes defends the long-term agentic economy despite voicing bubble concerns over debt-fueled data center buildouts and unprofitable labs.