Direxion Launches 2 Leveraged AMD ETFs Amid AI Chip Race
AMD joins Direxion's semiconductor single-stock ETF lineup as the chipmaker doubles down on AI and data center growth, with new bull and bear funds.
Direxion is expanding its single-stock ETF lineup with two new funds tracking Advanced Micro Devices (AMD), as the semiconductor company pushes deeper into artificial intelligence and data center markets, according to a company announcement Wednesday.
The launch is pivotal for AMD, which recently reported a 24% year-over-year revenue increase to $7.66 billion in its fourth quarter. The new exchange-traded funds offer traders concentrated exposure to AMD's stock amid growing competition in the AI chip market, where the company aims to challenge Nvidia Corp.'s (NVDA) dominance.
The new funds—the Direxion Daily AMD Bull 2X Shares (AMUU) and Direxion Daily AMD Bear 1X Shares (AMDD)—allow traders to take leveraged positions on AMD's daily performance, according to the announcement.
"AMD has a wealth of digital semiconductor expertise and is well-positioned to prosper from continued favorable trends in both artificial intelligence and data centers," said Direxion CEO Douglas Yones in the press release.
The ETF provider's move follows AMD's strategic shift toward AI chip development, marked by a 4% reduction in its global workforce announced in November 2024, according to Reuters.
AMD's Market Position Strengthens Despite Challenges
The company's data center segment saw revenue more than double in the last quarter, according to company filings, though AMD's stock declined more than 5% in extended trading after the earnings announcement due to lower-than-expected data center sales.
AMD CEO Lisa Su confirmed plans to launch next-generation RDNA 4 GPUs in early 2025, according to The Verge, highlighting the company's continued focus on gaming and graphics technology.
The new AMD ETFs join Direxion's existing semiconductor single-stock funds, which track companies including Nvidia, Taiwan Semiconductor Manufacturing (TSM), Broadcom Inc. (AVGO), and Micron Technology Inc. (MU).
Direxion emphasizes these products are meant for short-term trading rather than buy-and-hold investing, noting in filing documents that the funds involve "a high degree of risk" and are intended only for investors who actively monitor their positions.
With 87 ETFs traded on US markets, Direxion ETFs have total assets under management of $40.3 billion, according to etf.com data. Its largest fund is the $9.3 billion Direxion Daily Semiconductor Bull 3x Shares (SOXL).
