The Direxion Daily Semiconductor Bull 3x Shares (SOXL) ETF has been under pressure in the past few months as concerns about the artificial intelligence industry continued.
SOXL has crashed from $69.42 in July last year to the current $17, erasing billions of dollars in value. While the bearish trend may continue, there are signs that it is about to bounce back in the coming weeks.
Trump reciprocal tariffs ended
The first good news for semiconductor companies came from the US Court of International Trade, which ruled that Donald Trump did not have the authority to introduce universal tariffs on his self-styled “Liberation Day.”
The Trump administration is expected to appeal the decision. However, for now, the ruling will embolden other countries with which the administration is negotiating with, including China and the European Union.
It also means that there is a ray of hope that Trump’s tariffs will be stopped by the Supreme Court later this year.
The end of tariffs would be good for semiconductor companies like AMD, NVIDIA, and Intel. That’s because they would return technology items to earlier prices, which will lead to more sales. Most chip companies have complained about tariffs in their recent earnings call.
Strong NVIDIA earnings
The other good news for the SOXL ETF is the recent NVIDIA earnings, which were better than expected, as we predicted.
NVIDIA’s revenue jumped by 69% YoY to $44 billion as Blackwell shipments surged. That number was better than the expected $43 billion, and was higher than what it made in the four quarters of 2023 when it made $26 billion. This makes it one of the best-performing companies in the US.
NVIDIA’s net income jumped by 26% to $18.7 billion, while the diluted earnings per share (EPS) was $0.76.
The company also issued a strong forward guidance even as it faces a $8 billion loss of business in China. It expects that its revenue will be about $45 billion in the third quarter, meaning that its total figure would have been $53 billion.
NVIDIA’s business has been boosted by the data center business, whose revenue rose by 10% last quarter. Most notably, the gaming segment that has been under pressure lately also returned to growth, recording a 48% revenue surge to $3.8 billion. Jensen Huang said:
“Global demand for NVIDIA’s AI infrastructure is incredibly strong. AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate.”
Therefore, the rising NVIDIA stock price will likely boost the SOXL ETF since it is the biggest constituent company.
Read more: China will ‘move on’ with or without Nvidia chips, says CEO Jensen Huang
SOXL ETF stock price analysis
The other good news is that the SOXL ETF has formed a giant double-bottom pattern at $6.60, its lowest level in 2022 and 2025. A double-bottom is characterized by two down-peaks and a neckline, which, in this case, is at $69.45. Also, the two lines of the MACD indicator have crossed each other.
Therefore, if the pattern works out well, it means that the SOXL ETF will bounce back and possibly hit $69.42, which is about 945% above the current level. A drop below the double-bottom level at $6.60 will invalidate the bullish outlook.
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