Semiconductor stocks have come roaring back over the past month thanks to cooling trade tensions between the U.S. and China and renewed enthusiasm for AI hardware.
Strong earnings from chip giants helped also helped ease investor concerns that a trade war would hammer the U.S. semiconductor sector.
The Direxion Daily Semiconductor Bull 3X Shares (SOXL), which offers leveraged exposure to chip stocks, jumped 6.3% last week to close at $16.
SOXL has now nearly doubled from its post–Liberation Day low, though it remains underwater for the year.
The sector got a major boost after Nvidia (NVDA) blew past expectations, reporting adjusted earnings of 96 cents per share on $44.06 billion in revenue.
The company guided for $45 billion this quarter, sending a strong message that restrictions on exports to China haven’t dented demand.
AMD followed suit just weeks earlier, posting fiscal Q1 results that also beat expectations. Revenue hit $7.4 billion, with operating income at $709 million.
Meanwhile, its data center segment — which includes AI-focused chips — saw sales soar 57%.
While the short-term outlook is improving, the geopolitical backdrop remains volatile. And Washington’s chip crackdown is likely far from over.
Beijing lashes out as U.S. eyes more export controls
Last week, China’s Commerce Ministry blasted the Trump administration for its restrictions on advanced semiconductor exports and called for their removal.
"China has always maintained that there are no winners in a trade war and that protectionism has no way out," said ministry spokesperson He Yongqian, labeling the tariffs "misguided" and "unilateral."
He’s comments came in response toreports that the U.S. plans to widen the crackdown by targeting software firms that provide chip design tools, the latest frontier in the tech cold war.
A Siemens spokesperson confirmed to Bloomberg that the U.S. government had informed Electronic Design Automation (EDA) companies about new restrictions on working with Chinese firms, particularly those tied to military programs.
The tensions escalated further on Friday after President Trump accused China of having "totally violated" its trade agreement, prompting a swift rebuke from Beijing.
As the BBC reported, China urged the U.S. to "cease discriminatory restrictions against China." If this quarrel gets out of hand, the chip rebound could be short-lived.
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