The Direxion Daily MU Bull 2X Shares (MUU) jumped 38% on Thursday as a broad rally in semiconductor stocks lifted Micron Technology (MU) stock almost 18%. The chip sector advanced after Microsoft (MSFT) reported stronger-than-expected earnings that reinforced confidence in AI infrastructure spending, while Lam Research (LRCX) posted upbeat results and guidance, boosting sentiment across AI and semiconductor names. The gains helped spark a sharp rebound in MUU, even as the leveraged ETF remains down about 50% over the past month.
At first glance, the numbers appear contradictory. But MUU's performance highlights both the explosive gains generated by the AI-driven memory boom earlier this year and the amplified volatility that comes with leveraged ETFs. Even after its steep monthly decline, the fund remains up roughly 400% year to date and about 2,480% over the past year, making it one of the strongest-performing ETFs in the U.S. market.
The Rally Came Before the Correction
MUU spent much of the first half of 2026 riding one of the strongest rallies in the semiconductor sector.
Shares of Micron climbed as investors poured into companies exposed to artificial intelligence infrastructure, betting that soaring demand for high-bandwidth memory (HBM) and DRAM chips would persist as hyperscale cloud providers expanded AI data centers. The stock received repeated boosts from strong earnings, improving pricing trends and optimism surrounding next-generation AI hardware.
Because MUU seeks to deliver twice Micron's daily return, those gains were magnified, allowing the ETF to post several hundred percent gains before the recent correction began.
Why It Fell 50%
The July selloff reflected a sharp reversal across semiconductor stocks after an extraordinary run.
Investors locked in profits, valuations came under scrutiny and concerns emerged that the pace of gains across AI-related chipmakers had become unsustainable in the near term. Memory stocks also faced questions over whether new HBM supply could eventually ease the tight market that had fueled record pricing.
Those concerns triggered a broad correction in semiconductor names, with leveraged products such as MUU experiencing even steeper declines because they reset exposure daily. A series of consecutive down days can erode returns much faster than the underlying stock, making leveraged ETFs especially volatile during sustained pullbacks.
Earnings Spark the Next Leg Higher
Thursday's rally suggests investors remain focused on the longer-term AI story.
Micron exceeded Wall Street expectations for both earnings and revenue while issuing stronger-than-expected guidance, citing robust demand for AI memory products and continued strength in DRAM pricing.
The optimism was reinforced by Microsoft, whose quarterly results showed accelerating Azure growth and continued heavy investment in AI infrastructure. Together, the updates strengthened the view that demand for advanced memory remains supported by sustained cloud spending rather than short-lived enthusiasm.
Technicals Point to a Recovery Attempt
Thursday's gain marked one of MUU's strongest sessions in months and could signal the start of a recovery after July's sharp correction.
The ETF has bounced decisively from recent lows, but it remains well below the record levels reached earlier this summer. That leaves traders watching whether MUU can reclaim key moving averages and establish a new series of higher highs, confirming that the longer-term uptrend has resumed.
Technically, MUU remains in a recovery phase following July's sharp selloff. Despite Thursday's nearly 30% rally, the ETF still trades below its 20-day simple moving average, which aligns with a Sell indicator, according to TradingView. It is also more than 50% below its June all-time high.
Its 14-day RSI is at 51, which signals a Neutral indicator, meaning it is still not within the threshold of the overbought levels. Meanwhile, the ETF remains above its 200-day moving average, indicating the longer-term uptrend is still intact despite the recent volatility.
For investors, MUU's performance is also a reminder that leveraged ETFs offering spectacular gains during sustained rallies can coexist with equally dramatic drawdowns. A 50% monthly decline may appear severe, but after an earlier surge of several hundred percent, it has not been enough to erase one of the most remarkable runs in the ETF market this year.
