AI Capex Boom Drives Hottest ETF Trade Into Semiconductors, Not Crypto

Retail investors have crowned semiconductor exchange-traded funds the hottest trade of 2026, leaving crypto ETFs with far weaker individual flows. Chip funds absorbed about $3.2 billion in net retail buying since January 2025.

The Kobeissi Letter cited J.P. Morgan equity strategy data through April 29, 2026. Retail buying has more than doubled in 2026 alone, suggesting a structural pivot toward artificial intelligence (AI) equities.

AI Capex Supercycle Powers the Move

Hyperscalers including Microsoft, Amazon, Alphabet, Meta, and Oracle have guided 2026 capital expenditures of $600 billion to $720 billion, according to Kobeissi.

The figure marks a 36% to 70% year-over-year increase. About 75% of that spend funds AI infrastructure.

Cumulative retail net buying of semiconductor ETFs since January 2025, Source: J.P. Morgan via The Kobeissi Letter

Global semiconductor revenue could top $1.3 trillion in 2026, the largest annual jump in two decades. Memory chips remain in short supply because AI workloads consume high-bandwidth memory at scale.

Producers like Micron, Nvidia, and Taiwan Semiconductor Manufacturing Company (TSMC) all stand to benefit.

Liquid cooling and efficiency upgrades have unlocked even larger data center builds across the United States and Asia.

Hottest Trade Twist Crypto Did Not Catch

In April 2026, two major chip funds absorbed about $5.5 billion in inflows. The VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX) split the record monthly haul.

April flows beat the prior record set in December 2025. The Philadelphia Semiconductor Index (SOX) climbed about 38.7% over the same stretch.

Crypto ETFs have not kept pace. Bitcoin (BTC) spot funds drew near $2 billion in April inflows, while Ethereum (ETH) products posted weaker or negative numbers.

Crypto ETF Flows Total Flows By Asset. Source: X/Blockworks

Year-to-date returns for many crypto ETFs sit flat or lower. Bitcoin slid about 20% earlier in April before recovering.

Leveraged Bets Signal Caution

Retail buying flows in both directions. The Direxion Daily Semiconductor Bull 3X ETF (SOXL) and its bear twin (SOXS) traded a combined 330 million shares per day.

The volume marked a 16-month high. SOXL volume topped 99% of weekly readings over the past five years. The split suggests traders hedge exposure as well as chase upside.

Leveraged products carry meaningful decay in choppy markets. Hyperscaler earnings in the coming weeks will test whether AI capex guidance holds. The hottest trade in 2026 still belongs to chips, not coins.