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After a rocky start to 2025, the semiconductor sector has staged a dramatic comeback as investors pile into chipmakers with renewed optimism. The biggest winners? ETFs that double—or triple—down on the space, like the Direxion Daily Semiconductor Bull 3X ETF (SOXL), which surged nearly 10% Tuesday and has now more than doubled since the 2025 low on April 8.
Even without the supercharged leverage, semiconductor stocks have gained more than 35%, as measured by the chip sector benchmark VanEck Semiconductor ETF (SMH), since that low mark.
With U.S.-China trade tensions easing and the semiconductor leader Nvidia’s (NVDA) earnings looming large this week, Wall Street has rediscovered its appetite for the high-growth potential of semiconductors, which are driving the tech sector and the broader U.S. stock market higher.
Let’s dive into what’s driving this powerful rebound and what investors might expect for the rest of the year.
Semiconductors Rally as Trade Tensions Ease
One of the biggest catalysts for the semiconductor rally has been the de-escalation in trade tensions between the U.S. and China. After months of uncertainty and tit-for-tat tariffs that had weighed heavily on tech and manufacturing, the White House paused further tariffs in April. That move not only brought relief to global supply chains but also boosted investor confidence that the worst of the trade disruption might be behind us—for now.
Semiconductors sit at the heart of this trade story. Companies like Nvidia, Advanced Micro Devices Inc. (AMD) and Qualcomm Inc. (QCOM) rely heavily on both Chinese manufacturing and demand, and any sign of improved U.S.-China relations tends to spark buying in these names. The fact that the broader market has rallied in tandem suggests this isn’t just short-term optimism—it could be the beginning of a more sustainable upward trend for the sector.
Nvidia Earnings: Will Semiconductor Momentum Continue?
The next major event on investors’ radar is Nvidia’s quarterly earnings call after the market closes today. Analysts are expecting big things. The chipmaker is widely seen as the front-runner in artificial intelligence infrastructure, and demand for its GPUs remains strong in both the data center and consumer markets.
If Nvidia beats expectations, and perhaps more importantly, issues bullish guidance, the entire semiconductor space could get another jolt higher, as well as the broader but tech-heavy S&P 500 index.
Traders are positioning for just that. Options activity and semiconductor ETF gains illustrate the heightened expectations. But it’s not without risk. If Nvidia misses or disappoints with cautious guidance, we could see a swift reversal—especially in highly volatile instruments like leveraged ETFs.