Why Direxion Daily Semiconductor Bull 3X ETF Just Popped
Key Points
Micron reports earnings next week and may be worth $1,500 a share.
Intel stock is soaring on Trump-Xi summit hopes.
AMD just hit $1T market capitalization!
The Direxion Daily Semiconductor Bull 3X Shares ETF (NYSEMKT: SOXL) jumped 12.2% through 11:20 a.m. ET Monday, and for three big reasons: Micron (NASDAQ: MU), Advanced Micro Devices (NASDAQ: AMD), and Intel (NASDAQ: INTC).
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Together, these three stocks account for four of SOXL's largest holdings -- about 21% of its total market cap. Let's take them one at a time.
Why Micron is moving today
Stifel analyst Brian Chin reiterated a buy rating and $1,500 price target on Micron this morning, citing a durable "memory upcycle," undersupplied markets, and potentially 20% growth in DRAM sales in 2027 -- and lifting Micron stock nearly 3%.
Micron is also due to report Q4 earnings on Sept. 30, and most analysts expect the semiconductor memory chip stock to grow sales 350% to $51 billion, and earnings roughly 10x -- to $31.35 per share.
Why AMD is moving today
CPU and GPU specialist AMD is moving 9.1% higher for another reason: it hit a big milestone today. As StreetInsider.com observes, AMD just tripped a $1 trillion market capitalization for the first time. Momentum gains like these can become self-fulfilling prophecies, driving stocks ever higher.
Why Intel stock is moving today
A second reason AMD is moving -- and the reason its archrival Intel is up 14% today -- is the upcoming summit between U.S. President Trump and Chinese President Xi. Hopes are high the two executives will be able to strike a deal on artificial intelligence that will (1) avoid the AI Armageddon that pundits have been warning about this past week while also (2) permitting the AI industry to keep on growing -- and keep on buying computer chips from AMD and Intel!
Take big gains from these three stocks, multiply by three, and you get a 12% gain for SOXL today.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, and Micron Technology. The Motley Fool has a disclosure policy.
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