u/Winter_Ad6784

• Main story: broad semi selloff, not one company-specific blowup. SOXL is getting hit hard because SOXX is broadly red today. The biggest drags are Micron, Intel, Qualcomm, AMD, Marvell, Broadcom, Applied Materials, and Monolithic Power.
• Inflation is the broad-market trigger. April CPI came in at 3.8% year over year, above the 3.7% Reuters economist estimate. That pushed yields higher and pressured high-valuation growth/AI names.
• Laptop numbers are adding pressure to PC-exposed semis. KeyBanc reportedly said April notebook shipments fell 27% month over month, which is a negative read-through for Intel, AMD, Qualcomm, and other PC-exposed chip names.
• Micron (PE: 34.4) is the largest drag. MU is down about 8.6%, and because it is the largest SOXX holding, that alone is dragging SOXL by roughly 2.5 percentage points. I don’t see a clean negative Micron-specific headline; this looks more like profit-taking after the AI-memory run.
• Nvidia (PE: 53.4) is the lightest drag with Susquehanna raising NVDA’s target from $250 to $275, citing strong data-center performance from GB300 servers. Citi raised its target to $300, citing strong AI demand.

My take: Without a catalyst specific to semiconductors my thesis remains unchanged, the fundamentals are the same so this looks more like a bull flag/profit taking. It is true if the whole economy get blown up by broad political circumstances SOXL could be among the worst hit, but I don't think mildly poor inflation numbers are the point of no return in that regard. Worst case: Iran manages to maintain power and hold out. Trump doesn't figure Iran out by midterms but still holds the senate allowing him to continue. Energy and Fuel stay expensive which isn't good but it's not going to kill AI research, and it will help my side investment in ENLT anyways.

SOXL to 500$ EOY

• Main story: concentrated gains, not a broad semi rally. Most SOXX holdings are moving sideways today. The movement is being driven mainly by five names: Micron, Qualcomm, Nvidia, Credo, and AMD.
• Micron (PE: 37.0) is the largest driver. MU is benefiting from the AI memory squeeze plus Samsung labor-strike concerns, which could tighten DRAM/HBM supply further.
• Qualcomm (PE: 25.8) is the second-biggest driver. QCOM is still being repriced as more than a handset stock. Daiwa upgraded it to Outperform last week, citing future opportunities in data-center CPUs, physical computing, and edge AI.
• Nvidia (PE: 54.2) is contributing despite a modest move. NVDA’s weight makes even a ~3% move meaningful for SOXX/SOXL. The relevant setup is the market positioning ahead of its May 20 earnings. You can read my thoughts on upcoming earnings at the end of this post.
• Credo (PE: 112.2) is the high-beta AI infrastructure mover. CRDO has a small SOXX weight, but its large price move makes it one of the top contributors. They are big into datacenter infrastructure and managing massive amounts of data. There's nothing new on them as far as I could find, just volatile speculation.
• AMD (PE: 152.3) has been upgraded to Buy and had it price target raised to $450 by Goldman Sachs. Their in day graph appear to mainly just be following SOXX though.

If you're concerned about the Iran war, while energy and gas prices do have broad implications for the economy, higher energy costs doesn't necessarily hurt semiconductor demand directly. You can increase energy efficiency by undervolting the chips, for a mild cost in compute power. Also it seems the American economy and semiconductors in particular are strong enough to just eat the cost. That being said Iran is going to want to empty their oil reserves soon as shutting down pumps would be very expensive. Worst case they'll thread the needle and continue standing in a much weaker economic position as their oil economy faulters. Either way Trump is going to have to either win or fold before the midterms. That's why oil futures are high but not too expensive. It's certainly worth keeping an eye on though.

SOXL to 500$ EOY

• Main story: post-pullback rally in semis. The biggest SOXL drivers are Micron, AMD, Intel, Qualcomm, Broadcom. The rally is broad.
• Micron is the largest driver. The memory trade is ripping because AI/data-center demand is tightening DRAM/NAND supply. DRAM contract prices expected to rise 58%–63% QoQ in Q2, with NAND up 70%–75%, as AI server demand keeps supply tight.
• AMD remains a major AI/data-center read-through. AMD’s recent Q1 report showed strong AI/data-center momentum, with data-center revenue up 57% YoY, helping support the broader chip rally.
• Qualcomm is one of today’s biggest positive contributors. Daiwa upgraded QCOM to Outperform and raised its price target to $225, with the bull case centered on Qualcomm’s data-center AI pivot and valuation discount to other AI chip names.
• Intel is also a major contributor. I’m not seeing a clean new Intel-specific catalyst since yesterday noon, so this looks more like broad AI/semi momentum plus residual optimism from Apple reportedly exploring U.S. chipmaking alternatives with Intel and Samsung.

Worth noting early: NVDA Earnings call scheduled for 5/20. NVDA currently has a PE ratio of ~43. If they meet expectations this would drop to ~36 at current price, and continue to drop to ~30 if they hold this in future quarters. My spin: NVDA has a relatively low PE (emphasis on relatively, historically a PE of 25 was considered upper end of healthy but TSLA has comfortably held a PE of 400 for years). AI datacenter spending (the main factor in NVDA earnings) at large doesn't appear to be slowing down. Earning will hold steady and prices will rise with renewed confidence from earnings keeping NVDA's PE in the 40's or even 50's and valuation of the rest of the industry will follow.

SOXL to 500$ EOY

• Main story: looks like a bull flag / post-rally pullback. Semis are retreating after the sharp AMD-led rally. Marvell and Teradyne are among the biggest weighted drags, but I don’t see a clean new company-specific negative catalyst for either; they look like high-beta giveback after the AI/semi run.
• Qualcomm is the big positive offset. QCOM is up sharply as traders reprice its AI/data-center and “Physical AI” story, with attention moving beyond handsets toward hyperscaler AI opportunities.
• AMD is now a drag after being yesterday’s main rally driver. Likely from people taking profits. The prior catalyst is still AMD’s strong Q1: data-center revenue was $5.8B, +57% YoY, but today it is giving some back.
• Astera is another high-beta profit-taking drag. ALAB is down hard despite reporting Q1 revenue of $308.4M, +93% YoY.
• MACOM is a positive exception. MTSI beat fiscal Q2 estimates and guided Q3 above consensus.
• ARM is a sentiment drag, but still not a major direct-weight drag. ARM is down on smartphone weakness and AI-chip supply concerns, but its SOXX weight is small.

Note: Microchip (MCHP) has an earnings call after close today.

I considered yoloing ARM earnings yesterday and boy am I glad I didn't get on that dumpster fire lmao.

SOXL to 500$ EOY

• AMD is now the main driver. AMD reported Q1 revenue of $10.3B, up 38% YoY, with data-center revenue up 57%, and guided Q2 revenue to about $11.2B. That explains AMD’s outsized move and the broader AI/server-chip read-through.
• Intel still riding high from talks with Apple. Yesterday Intel took the cake due to talks with Apple over supplying them with chips. There's no news on that front today but there is reinvigorated confidence in Intel now.

Personally I sold a little SOXL today to put into ENLT. These chips were investing in are going to need to be powered somehow and solar is becoming increasingly economical. SOXL to 500$ EOY