SOXX, SOXL Retreat To Red Premarket, But Retail Is 'Extremely Bullish' Ahead Of Tech Earnings

Chip stocks lost $200 billion on October 22 after Lam Research warned of supply chain constraints, despite NVIDIA's optimistic AI demand outlook. Lam Research's stock fell 11.76%, and other semiconductor stocks also declined. The Philadelphia Semiconductor Index dropped 6.72%. Meta's free cash flow fell to $784 million, and Alphabet reported its first cash-flow-negative quarter.

Hedge funds have been net selling global AI stocks for five consecutive sessions, reversing all their cumulative net buying since 2025, according to Goldman's Prime brokerage. Meanwhile, retail investors poured a record $7 billion into SOXL, a triple-levered semiconductor ETF, during the week when semiconductors had their longest losing streak since 2006.

iShares Semiconductor ETF (SOXX) fell 4% on October 17, 2026, marking its ninth straight day of losses. The fund dropped 12% over the week, driven by AI development concerns, CoreWeave's credit issues, and higher-than-expected U.S. inflation. SOXX is trading at $493.39, 40.2% above its GF Value™ of $351.82, indicating overvaluation. It has a GF Score™ of 85/100, reflecting strong growth and profitability but valuation concerns.

The iShares Semiconductor ETF (SOXX) fell over 4% on Friday, extending its losing streak to nine sessions, the longest since May 2026, driven by a broader selloff in chip stocks. The ETF tracks companies in the semiconductor sector, reflecting broader market trends in the industry.

Semiconductor stocks fell as China's CXMT announced progress in DRAM technology. Micron (MU) dropped 3.9%, SOXL lost 8.2%. CXMT's 4F² architecture could challenge incumbents. TrendForce data shows CXMT's market share rose to 9.5%. Investors worry about pricing power erosion. Key semiconductor indices and stocks declined.

Direxion Daily Semiconductor Bull 3X Shares (SOXL) fell 5.3% in pre-market trading to $155.60 due to sector-wide profit-taking in chip stocks, amplified by its 3x leverage. Key holdings like Intel, AMD, and Micron also declined. Bearish options data and broader market weakness contributed to the drop. SOXL's 52-week range is $28.12 to $302.00, highlighting its volatility.