There's a New King in Chip ETFs After Record $805 Million Inflow

(Bloomberg) — With the artificial-intelligence hype sweeping across Wall Street, a massive inflow turned a popular ETF tracking chipmakers into the largest of its category.

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The iShares Semiconductor exchange-traded fund (ticker SOXX) saw a nearly $805 million influx on Thursday, the most for one session going back to at least 2001, data compiled by Bloomberg show. The intake places the fund as the biggest 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 play thanks to its big NVDA weight,” said BI analyst Athanasios Psarofagis, referring to Nvidia Corp., which hit a record this week. He added that SOXX on Thursday saw its second-highest trading day ever.

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

The Global X Robotics & Artificial Intelligence ETF (BOTZ), with a nearly 12% net Nvidia weight, is on pace for a 3% rally this week, while the VanEck Video Gaming and eSports ETF (ESPO) is on track to add 1.9%. On the other end, Marvell makes up more than 5% of the Defiance Next Gen Connectivity ETF (FIVG), and that fund has advanced 4% in the five-day stretch.

Meanwhile, the GraniteShares 1.5x Long NVDL Daily ETF (NVDL), which tracks 1.5 times the daily performance of Nvidia, has jumped 36% this week amid higher-than-usual volume for its best weekly stretch since its inception.

Nvidia this week forecast sales that blew past analysts estimates, citing demand for AI processors. Sales in the three months ending in July will be about $11 billion, the company said, way above average analyst estimates of $7.2 billion. Marvell, meanwhile, surged after it said it expected revenue from the trendy growth driver to soar this year.

Investors have been hyper-focused on AI trends, especially since the launch of OpenAI Inc.’s ChatGPT last year. And it could be a boost for the ETF space as well — BI projects that funds linked to artificial intelligence could see their assets grow three-fold 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.

“The thematic ETFs representing the future of tech, machine learning and AI are certainly having their renaissance,” said Sylvia Jablonski, chief executive officer at Defiance ETFs.

–With assistance from Isabelle Lee.