Domestic Investors Pour $798M into High-Risk Semiconductor Leveraged ETF

Domestic investors have intensified their bets on U.S. semiconductor stocks in the days leading up to and following Nvidia's earnings announcement, according to data from the Korea Securities Depository. The largest net purchase of overseas stocks by domestic investors was 'Drexion Daily Semiconductor Bull 3X ETF (SOXL)', which attracted $798.04 million between January 21st and 27th.

SOXL is a high-risk leveraged exchange-traded fund that triples the daily yield of the index consisting of major U.S. semiconductor stocks, making it a product with significant potential for profit but also loss. Nvidia's outperformance of market expectations has analysts predicting continued growth in the AI industry and solid demand for semiconductors.

Han Ji-young, a researcher at Kiwoom Securities, noted that 'if the inflation burden is eased and the possibility of a re-emergence of long-term interest rates is limited, a favorable environment for growth stocks such as AI and semiconductors can be created.' However, experts caution against buying into high-magnification leveraged products due to their volatility.

Individual semiconductor stocks also saw increased purchases, with Broadcom ranking 12th in net purchase at $42.38 million, SanDisk at $24.75 million, Marvell Technology at $15.71 million, Nvidia at $13.87 million, and Intel at $11.59 million.