Korean Retail Investors Bet $890 Million on 3x ETF Ahead of Nvidia Earnings

Korean retail investors are placing a significant bet on U.S. semiconductor and technology stocks, investing over $890 million in a leveraged exchange-traded fund (ETF) ahead of Nvidia's earnings report. The Direxion Daily Semiconductor Bull 3X Shares ETF (SOXL) saw a net purchase of $891.15 million from August 18 to August 24, surpassing the combined net purchases of the next 19 ranked securities.

This aggressive move comes after Korean investors sold a net $1.77 billion worth of U.S. stocks earlier this month as they took profits. The surge in buying extends beyond leveraged products and includes memory semiconductor stocks and individual technology companies. The Roundhill Memory ETF (DRAM) and Sandisk ranked third and second among individual stocks, respectively, with $84.12 million and $100.94 million in net purchases.

The recent decline in the Philadelphia Semiconductor Index, falling 9.5% from 12,621.01 on August 17 to 11,423.17 on August 24, has prompted investors to position for a rebound. Improved sentiment is attributed to increased spending by AI infrastructure companies, easing concerns about the AI boom reaching a peak. All eyes are now on Nvidia's earnings report, scheduled for August 26 U.S. time, which is seen as a key indicator of whether major technology companies will continue to invest heavily in AI.

Analysts are closely monitoring Nvidia's recent decision to raise AI server prices by more than 15%, its impact on revenue, and operating margins. The market anticipates second-quarter revenue of about $92 billion, exceeding Nvidia's $91 billion guidance from May. However, external risks such as U.S. lawmakers' pressure on AI data center regulation and additional economic sanctions against Iran could negatively impact investor sentiment.