Chips on Deck: Semis Set Up for a Volatile Stretch

As the semiconductor sector takes center stage this earnings season, a combination of explosive growth, innovation, and persistent AI demand is putting companies like Nvidia (NVDA), Broadcom (AVGO), KLA (KLAC), and Lam Research (LRCX) squarely in the spotlight.

Key Earnings and Performance Drivers

Nvidia (NVDA) shattered records in its latest quarter, reporting $30.0B in revenue—up 15% from Q1 and 122% year-on-year. Data Center revenue fueled the beat, surging to $26.3B on high demand for Hopper GPUs and anticipation for Blackwell releases. Reports Aug 27, 2025 (after-market) — the sector’s single biggest swing factor. YTD +34%.

Broadcom (AVGO) saw Q2 AI revenue leap 46% year-on-year to $4.4B, with total revenue up 20% from last year at $15.0B. The firm's robust guidance calls for further topline acceleration. Reports for Sep 4, 2025 (after-market); YTD about +32%.

KLA (KLAC) delivered Q2 revenue of $3.08B, on the high end of guidance, and an EPS of $6.16—impressive figures underscoring management’s operational execution. posted Q4 FY2025 results on Jul 31; shares are +49% YTD.

Lam Research (LRCX) posted 33.6% year-over-year revenue growth (Q2: $5.17B), handily beating analyst forecasts. Guidance for next quarter remains bullish, with adjusted EPS and operating income well ahead of expectations. June-Q earnings on Jul 30: +47% YTD.

Macro backdrop remains supportive but twitchy: AI infrastructure demand is strong, yet valuations are rich and sentiment is hypersensitive into NVDA’s print.

ETF Insights: Leveraged and Core Exposure

Trader’s Corner — Leveraged Tactics (SOXL, USD)

For short-term traders eyeing outsized moves around prints:

Direxion Daily Semiconductor Bull 3x (SOXL): Targets +300% of the NYSE Semi Index for a single day. Net expense ratio 0.75%; assets ~$12.1B. YTD was +7.8% as of Aug 13, illustrating how daily reset and compounding can make multi-month returns diverge sharply from “3× the index.” Not for buy-and-hold.

ProShares Ultra Semiconductors (USD): Seeks 2× the Dow Jones U.S. Semiconductors (daily). YTD +41.5%; expense ratio 0.95%; net assets ~$1.51B. Less gearing than SOXL but still path-dependent and volatile.

Risk note: Leveraged ETFs magnify both gains and losses, and are designed to match daily, not cumulative, index moves—a key reason many traders flatten positions before/after major earnings.

Core Holdings: SOXX & SMH

If you want semiconductor beta without leverage decay, two liquid anchors dominate:

iShares Semiconductor ETF (SOXX): Tracks the NYSE Semiconductor Index, offering broad chip and equipment exposure. YTD +18.25%; expense ratio 0.34%; AUM ~$13.75B. The index skews toward mega-caps (NVDA, AVGO) while keeping equipment names (KLAC, LRCX) in the mix.

VanEck Semiconductor ETF (SMH): Follows the MVIS US Listed Semiconductor 25 Index with a concentrated top-heavy profile. YTD +24.42%; expense ratio 0.35%; AUM ~$26.9B. Higher concentration can amplify both upside and drawdowns around single-name catalysts like NVDA.

Macro Perspective & Outlook

2025 has already proven a banner year for chip stocks, with both earnings momentum and technological advancements driving sector multiples higher. The relentless pace of AI adoption continues to push hardware demand, while rising capex signals a bullish industry outlook for the next several quarters. However, leveraged products like SOXL and USD should be approached with caution, given the volatility and risk of daily resets.

With semiconductor capex ramping and global supply chains normalizing, the sector’s multi-year runway remains intact. For investors seeking competitive returns, both leveraged and core ETFs present opportunities—though understanding the risk-reward landscape is essential.

Compare semiconductor ETFs like SOXX, SMH, SOXL, and USD side by side with our ETF Compare Tool