A small number of US-listed exchange traded funds hit record highs last week, but underscoring the strength in the
technology sector, 10 of ETFs hitting all-time highs were tech funds. And proving that semiconductor stocks are playing an
important part in technology's 2017 surge, three of the tech ETFs that hit record highs were chip funds.
One of those chip ETFs that just joined the record-high club tracks the PHLX SOX Semiconductor Sector Index, one of
the most widely followed gauges of chip stocks. That proved to be good news for the Direxion Daily Semiconductor Bull 3X
Shares (NYSE: SOXL).
SOXL, which attempts to deliver triple the daily performance of the PHLX SOX Semiconductor Sector Index, also hit an
all-time high. The PHLX SOX Semiconductor Sector Index holds just 30 stocks and its lineup is dominated by the likes of Nvidia
Corp. (NASDAQ: NVDA), Broadcom Ltd. (NASDAQ:
AVGO), Texas Instruments Inc. (NASDAQ: TXN) and Dow component Intel Corp. (NASDAQ: INTC).
That quartet of semiconductor titans combine for nearly a third of the PHLX SOX Semiconductor Sector Index's weight.
Looked at another way and remembering that leveraged ETFs like SOXL are daily instruments, it would be bad
luck to be holding SOXL on a day when three or four of those stocks declined in unison.
As it pertains to Nvidia, the largest member of the index SOXL tracks, some analysts remain bullish on the name.
As Benzinga
reported earlier this week, Jefferies anlayst
Mark Lipacis maintained a Buy rating on Nvidia's stock with an unchanged $140
price target as the company is showing signs of being "the primary beneficiary" of an ongoing shift in the computer business
model.
“Lipacis
noted that his firm recently hosted three artificial
intelligence themed conferences and the main takeaway from each is the same. Specifically, startups and cloud players all say
the only reason they're able to operate is because of Nvidia's GPU and software,” Benzinga reported.
SOXL's bearish counterpart, the Direxion Daily Semiconductor 3X Bear Shares (NYSE: SOXS), has recently seen an increase volume, according to Direxion data.
However, traders remain fans of SOXL as highlighted by average daily inflows into the leveraged bull semiconductor
ETF of nearly $257,000 over the past month, according to issuer data.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.