2026-08-17 · etfs

AI Infrastructure Trade Still Alive. Seize It with SOXL

There's no denying that artificial intelligence (AI) infrastructure equities endured a rough stretch in July and "rough" might even be an understatement. However, traders shouldn't write off the sector just yet because the AI infrastructure trade is already showing signs of life again.

Not surprisingly, semiconductor stocks loom large in that resurgence. This is one good indication that aggressive traders should closely monitor the Direxion Daily Semiconductor Bull 3x Shares (SOXL). Already one of the largest and most frequently traded leveraged ETFs in the U.S., SOXL seeks to deliver 300% of the daily returns of the widely observed NYSE Semiconductor Index.

Put simply, this isn't the ETF to stash in a retirement account, but for risk-aware traders, SOXL can be a valuable tool for capitalizing on AI momentum. That momentum could accrue over the near-term because, as Morgan Stanley noted in a recent article, some of the top AI infrastructure companies remain fundamentally sturdy.

"Morgan Stanley Research attributes the recent decline to short-term investors positioning rather than deteriorating fundamentals and expects demand for AI compute to significantly outpace supply for years to come," the bank said. "AI capabilities should continue improving at a non-linear pace, increasing the long-term value of the infrastructure supporting the technology."

SOXL Opportunities Abound

Demand for the AI chips purveyed by many of the companies comprising SOXL's underlying index remains sturdy and indicates that the ETF is still a relevant consideration for risk-tolerant short-term traders.

"Large technology companies, or hyperscalers, continue to invest aggressively because they are confident that their unprecedented spending on AI will pay off," noted Stephen Byrd of Morgan Stanley.

While SOXL is not an ETF to be held for months or years, it could prove responsive to the jaw-dropping trends in AI infrastructure spending. The estimated $800 billion hyperscalers are expected to spend this year is staggering in its own right, but that figure is expected to jump $1.2 trillion in 2027 and $1.4 trillion the following year.

This strong and growing compute demand lays the groundwork for short-term trading opportunities with SOXL.

"Businesses that are positioned to benefit from growing demand for AI compute, such as semiconductor producers, as the value of intelligence rises and supply remains constrained," concluded Morgan Stanley.

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