Investors Pour $11 Billion Into Chip ETFs After 29% Rout

The liquidation of AI-focused hedge fund Situational Awareness triggered a sharp selloff in the Philadelphia Semiconductor Index and chip shares, with related stocks tumbling as much as 29%. The episode exposed the vulnerability of crowded, leveraged trades built around the artificial-intelligence boom, while testing whether investors still view semiconductors as a durable long-term growth theme.

Investors treated the rout as a buying opportunity, pouring more than $11 billion into semiconductor exchange-traded funds over the latest two trading sessions. The rebound in risk appetite extended beyond equities: high-yield bond funds and spot bitcoin ETFs also drew strong inflows. The cross-asset demand suggests buyers moved quickly to add exposure after the liquidation-driven shock, despite continued volatility in AI-linked securities.