With the tailwinds blowing from artificial intelligence (AI), the semiconductor continues to witness expansive growth. This was further confirmed with a strong sales revenue showing in the third quarter.
Data from Omdia confirmed the growth of the worldwide semiconductor industry as a result of this 8.5% sales increase in Q3. Data also revealed there’s been a 25% year-over-year increase in sales. Again, AI has been the catalyst, as its processing requirements will fuel the need for more semiconductors.
“The high demand for AI is setting 2024 up to be a record-breaking year. Semiconductor revenue from the first three quarters of 2024, approximately USD 494 billion, has already surpassed the total for all of 2020. However, this robust revenue is not evenly distributed across the industry. For example, the industrial sector is facing weak demand and is projected to see a 16% year-over-year decline in 2024,” said Cliff Leimbach, senior analyst at Omdia.
The persistence of AI as an investing theme can continue to feed the semiconductor industry, adding more bullishness in 2025. The long-term trend skews towards growth. However, price dips are inevitable and traders need the flexibility to game the markets for profits. As such, Direxion’s suite of leveraged ETF products can give traders the tools they need to profit from a market rally or a subsequent price correction.
Leveraging Semiconductor Exposure
If upside can continue for the semi industry, traders can maximize exposure using the Direxion Daily Semiconductor Bull and Bear 3X Shares (SOXL). The fund tracks the largest movers and shakers within the industry. It offers traders diversification as opposed to accepting the concentration risk associated with holding one position in a single stock.
Additionally, SOXL seeks daily investment results equal to 300% of the daily performance of the NYSE Semiconductor Index. That index is a rules-based, modified float-adjusted market-capitalization-weighted index that tracks the performance of the 30 largest U.S.-listed semiconductor companies.
As mentioned, when prices dip, traders can use the inversed Direxion Daily Semiconductor Bear 3X Shares (SOXS) or the associated inverse single-stock ETFs for NVDU, TSMX, MUU, and AVL. For short-term pullbacks, these funds are ideal to trade bearish momentum.
Nvidia and Taiwan Semiconductor Manufacturing represent a couple of the biggest names in the industry. As such, traders can also double their exposure to both using single-stock ETFs such as the Direxion Daily NVDA Bull 2X Shares (NVDU) and the Direxion Daily TSM Bull 2X Shares (TSMX).
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