SOXX, SOXL Retreat To Red Premarket, But Retail Is 'Extremely Bullish' Ahead Of Tech Earnings

• Last week, technology and chip stocks took a major beating on Wall Street as concerns around the AI buildout and ballooning debt weighed on sentiment. 
• On Monday, however, the tables turned as a positive outlook and rising earnings expectations shifted sentiment. 
• Meta Platforms and Tesla are due to report Q3 results later this week, while International Business Machines, Honeywell International and Bloom Energy will also post their results. 

Technology and artificial intelligence exchange-traded funds are slipping back into negative territory after closing higher on Monday, following a sharp selloff last week. 

The iShares Semiconductor ETF (SOXX) was down more than 1% in premarket trading early Tuesday, while the Direxion Daily Semiconductor Bull 3X Shares (SOXL) lost over 4% at the time of writing. 

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However, retail investors are still ‘extremely bullish’ on the two semiconductor ETFs ahead of key tech earnings week. 

Earnings Anticipation

Last week, technology and chip stocks took a major beating on Wall Street as concerns around the AI buildout and ballooning debt weighed on sentiment. 

SOXX fell nearly 12% last week, while SOXL closed the week nearly 33% lower. 

On Monday, however, the tables turned as a positive outlook and rising earnings expectations took hold. Meta Platforms (META) and Tesla (TSLA) are due to report Q3 results later this week, while multiple other technology companies, including International Business Machines Corp. (IBM), Honeywell International, Inc. (HON), Lam Research (LRCX) and Texas Instruments (TXN), will also post their results. 

AI-related companies like power providers Bloom Energy (BE) and Valero Energy (VLO) will also report their earnings by Friday. 

SOXX was up 1.73% at Monday's close, while SOXL jumped more than 5%. 

SOXX, SOXL: Retail Eyes Reversal To Green 

Retail investors are eyeing a leg up amid expectations for positive results from technology companies. 

One user said, “$SMH $SOXX $SOXL The few times the semi etf sold under the bottom bollinger band, the sector had a multi day rally. This is also setting itself up at a time where hyperscalers report and their language around spending might be accretive to this sector and the AI Hardware that lives inside it. Keep an eye out for the rest of October. Either the market reverses lower on bond yield tensions or this breaks violently higher.”

Another user said, “$SOXL at this point seems like we need confirmation that demand is robust via earnings to see semis rebound in a sustained way. And or resolution of oil issues.”

A third user said, “$SOXL been scalping the name all day. $40K for ins and outs but back to holding for earnings. Narratives change faster than you think.”

SOXX is up nearly 67% year-to-date, while SOXL has rallied by over 134% in the same time. 

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