Direxion Daily Semiconductors Bull 3x Shares (SOXL) tumbled 10.90% in pre-market trading on Wednesday, extending a brutal sell-off in the global semiconductor sector as the leveraged ETF amplified losses from the underlying index.

The sharp decline was fueled by escalating skepticism over the sustainability of AI capital expenditure. Reports that NVIDIA was planning to provide approximately $250 billion in financing guarantees for OpenAI reignited fears of circular financing logic underpinning massive AI infrastructure investments. The Philadelphia Semiconductor Index had already fallen nearly 5% in prior sessions, with NVIDIA dropping roughly 5% and AMD declining about 8%, pushing chip stocks to their lowest levels in over two months.

Adding to the pressure, growing competitive threats from China further dampened sentiment. The explosive trading debut of Chinese memory chip maker CXMT and reports of Chinese companies making significant progress in producing deep ultraviolet lithography machines stoked fears of increased competition for established players. Even NXP Semiconductors, which reported better-than-expected quarterly results and issued above-consensus guidance, fell over 4% in after-hours trading, underscoring the severity of the sector-wide selling pressure. As a 3x leveraged bull ETF tracking the 30 largest U.S.-listed semiconductor companies, SOXL's decline was significantly amplified relative to the underlying index movement.