Less than three weeks into Trump’s second term, two market shocks complicated the investing scenario — one is directly aimed at tech investing, i.e. the DeepSeek rout and the other is the trade war. Amid this scenario, it has been noticed that tech investors are aggressively buying the dip.

Just a week earlier, fears over competition from Chinese AI challenger DeepSeek led to a sharp decline in chip stocks, with NVIDIA NVDA at the forefront of the selloff. Note that the Chinese startup DeepSeek has supposedly developed an AI assistant using cheaper chips and less data than existing models while delivering a comparable performance (read: Will the Rise of DeepSeek Usher in a New AI Era? ETFs in Focus).

Leveraged Buying Amid Market Volatility

Despite the turbulence, investors responded aggressively—many using leverage. On Jan. 27, NVIDIA plunged 17%, marking its worst decline since the early pandemic in 2020. Yet, the GraniteShares 2x Long NVDA ETF NVDL, which amplifies Nvidia’s daily returns, attracted $1.6 billion in inflows last week. This suggests that investors intended to capitalize on the dip, even as losses in leveraged products were magnified (read: Palantir Soars on Solid Q4 Earnings, Cautions on DeepSeek: ETFs to Buy).

Retail Traders Double Down

Data from Vanda Research shows that during NVIDIA’s latest sell-off, retail traders injected cash into the market at the highest rate since the November election period, as quoted on Yahoo Finance. Measured across ETFs and single stocks, this surge highlighted investors' conviction in tech’s long-term upside.

The "buy-the-dip" mindset is not new. Years of easy money and rapid recoveries — spanning from the global financial crisis to the post-COVID rally — have conditioned a generation of traders to see market pullbacks as buying opportunities.

More tests ahead for investors

While the buy-the-dip strategy has paid off mostly in the past, it is likely to be tested again soon. The market’s heightened sensitivity to event risk, as seen with DeepSeek and tariff concerns, suggests more volatility ahead. With an active President and historically choppy market conditions in a first-term year, even the most bullish strategists cannot rule out the potential turbulence.

Despite the current risks, the latest market trend says that while markets may be sensitive, investor confidence in buying the dip especially in Big Tech remains unaverred. Let’s discuss some ETF investing strategies that could be helpful in the current scenario.

Tap Covered Call ETFs to Earn Higher Income

A covered call strategy is an investing technique that saves one from market selloffs to a large extent. Historically, covered call strategies have outperformed their underlying securities in bear, range-bound, and moderate bull markets but lag during strong bull rallies when securities frequently and sharply exceed their strike prices.

Global X Nasdaq 100 Covered Call ETF QYLD follows the CBOE NASDAQ-100 BuyWrite V2 Index measures the total return of a portfolio consisting of common stocks of the 100 companies included on the NASDAQ-100 Index and call options systematically written on those securities through a buy-write or covered call strategy. The fund charges 61 bps in fees and yields 12.33% annually.

Global X Nasdaq 100 Covered Call & Growth ETF QYLG follows the CBOE Nasdaq-100 Half BuyWrite V2 Index, which measures the performance of a theoretical portfolio that holds a portfolio of the stocks included in the NASDAQ 100 Index and writes a succession of one-month at-the-money covered call options. The ETF yields 24.82% annually and charges 35 bps in fees.

First Trust Nasdaq BuyWrite Income ETF FTQI invests mainly in equity securities listed on U.S. exchanges and by utilizing an "option strategy" consisting of writing (selling) U.S. exchange-traded covered call options on the Nasdaq-100 Index. The ETF yields 11.58% annually and charges 75 bps in fees.

Semiconductors Should Stay Strong

DeepSeek or Big Tech, AI will be in fine fettle, and so will the demand for chips. Despite recent doubts about spending, Microsoft MSFT and Meta META executives argue that large-scale infrastructure investments are crucial for long-term AI dominance. Meta CEO Mark Zuckerberg indicated that "investing very heavily" in capital expenditure and infrastructure will be a strategic advantage over time, as quoted on Yahoo Finance. 

Microsoft CEO Satya Nadella pointed out that the company’s spending is necessary to overcome capacity constraints and meet surging AI demand. Hence, semiconductor ETFs like VanEck Semiconductor ETF SMH seem to be a good buy now (read: Will 2025 See Slowing AI Investments in Big Tech? ETFs in Focus).

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Microsoft Corporation (MSFT) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

VanEck Semiconductor ETF (SMH): ETF Research Reports

Global X Nasdaq 100 Covered Call ETF (QYLD): ETF Research Reports

Global X Nasdaq 100 Covered Call & Growth ETF (QYLG): ETF Research Reports

Meta Platforms, Inc. (META) : Free Stock Analysis Report

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