Retail investors are pouring into semiconductor ETFs at a historic pace, turning the AI infrastructure boom into one of the hottest public-market trades while crypto ETFs attract a more uneven bid.
J.P. Morgan equity strategy data shared by The Kobeissi Letter put net retail buying of semiconductor ETFs at about $3.2 billion since January 2025. The flow has accelerated this year as investors position around the AI data-center buildout, where chips, memory, networking, cooling, and power infrastructure have become the clearest equity beneficiaries.
The move is being driven by hyperscaler spending. Microsoft, Amazon, Alphabet, Meta, and Oracle are expected to spend more than $600 billion this year on data centers and AI-related infrastructure, according to Reuters. That spending path has made semiconductor funds a direct expression of the AI capex cycle, especially as investors look for exposure beyond single-name Nvidia risk.
The flow data has been strongest in the largest chip ETFs. The VanEck Semiconductor ETF (SMH) and iShares Semiconductor ETF (SOXX) pulled in roughly $5.5 billion in April, with SMH drawing about $3.4 billion and SOXX taking in about $2.05 billion, according to Benzinga. That monthly total surpassed previous records for the category.
ETF.com also captured the speed of the rally, noting that SOXX gained 42% in 17 trading days from its March 30 low to its April 23 close. SMH nearly matched the momentum, helped by its heavier exposure to the largest AI chip names.
The mechanism is straightforward. Hyperscalers raise capex guidance, chip suppliers get a clearer demand signal, ETF buyers chase diversified exposure, and liquidity concentrates in the biggest semiconductor funds. Crypto ETFs have a different transmission chain. Bitcoin and Ethereum funds depend more heavily on price momentum, risk appetite, regulatory flows, and spot-market liquidity than on a visible corporate spending cycle.
Crypto ETFs did not collapse in April. Spot Bitcoin ETFs attracted almost $2 billion during the month, while Ethereum ETFs broke a five-month outflow streak with about $356 million in April inflows, based on recent Bitcoin and Ethereum ETF flow data. That recovery helped turn the crypto ETF story more constructive after a difficult first quarter.
The difference is intensity. Semiconductor ETFs are pulling in retail money as a concentrated AI capex trade, while crypto ETF demand is still more split between institutional Bitcoin accumulation, tactical macro positioning, and weaker Ethereum conviction. Bitcoin remains the stronger crypto ETF product, but it is not capturing the same retail-equity enthusiasm that chip funds are seeing.
Leveraged semiconductor ETFs add a caution signal. The Direxion Daily Semiconductor Bull 3X ETF (SOXL) and Direxion Daily Semiconductor Bear 3X ETF (SOXS) have seen heavy activity as traders chase both upside and hedges. Direxion states that the funds seek 300% or -300% of the NYSE Semiconductor Index for a single day, and warns that they should not be expected to deliver three times or negative three times cumulative returns over longer periods.
The ETF market is sending a clear message: the AI capex boom is giving retail traders a simpler trade than crypto right now. Chips have a spending cycle, visible buyers, and direct earnings leverage. Crypto still has upside when liquidity improves, but until Bitcoin and Ethereum flows broaden into a stronger risk-on wave, the hotter ETF trade remains tied to semiconductors.
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