Chip valuations have reset, but the SOX technicals point to one more leg lower
As seen on the 24/7 Wall St. homepage on October 21, 2026.
Chip valuations have only just reset from two to three times their median levels, so the downside is not finished. The technician Borgeat cites puts strategic support at 10,350 on the SOX.
For many semiconductor companies $SOXX, valuations have risen to two to three times their median levels. In recent months, some of them have returned to their normalized and reasonable valuations due to a) improving fundamentals and b) the current correction. On top of that, https://t.co/e9EqqN9LGU [Quoted @arvyMacroCycles]: Semiconductors: the rebound from the late-July cycle low looks complete. We see the SOX in an A-B-C correction, with wave B now topped. Strategic support: 10,350. Below the early-October top, the risk is a wave C undershoot. https://t.co/ui19jutvAf
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Semiconductor valuations have fallen back to normalized territory after the selloff, according to Thierry Borgeat, who posted on X on October 21, 2026.
Arvy Macro Cycles, cited by Borgeat, sees the Philadelphia Semiconductor Index finishing an A-B-C correction with wave B topped, leaving a third leg lower still ahead.
Strategic support sits at 10,350, and a break beneath the early-October high opens the door to an undershoot below it.
Cheap individual chip stocks will not shield investors while the index works through a wave C decline.
Mentioned: SOXX