iShares Semiconductor ETF

A 10-point gap between the chip ETFs and their largest holding means money is rotating inside the sector rather than leaving it.

The semis are up 5% even though its biggest member is down 5%. Wild times. $SOXX $SMH $NVDA

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Borgeat frames the AI-chip drawdown as a forced hedge fund unwind rather than a verdict on AI demand. In 1998, that kind of deleveraging was followed by a violent melt-up.

It is 1998 all over again. This time it is not LTCM. It a whole bunch of HFs. Remember what happened thereafter? Yup… https://t.co/PVp7aK8mj0 https://t.co/ylYo1J2eIt [Quoted @ThierryBorgeat]: AI Semis Plummeted. The AI Boom Did Not. 19 Stocks to Consider. It is time to prepare accordingly. $SOXX Read here: https://t.co/t03hAR5hsr https://t.co/6J8nBRDyT2

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A five-day drawdown this steep has happened only five other times in the chip index's history, which puts every semiconductor ETF holder in rare company this week.

The Semis (SOX) just fell 20%+ in the last five days, something it has only done five other times in its history. $SMH $SOXX https://t.co/39r8M3Ua8T

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The semis trade has not closed below its 200-day average since early 2025, so today's defense of that line decides whether this is a dip or the start of something deeper.

The chart of the day: The semis ETF $SOXX is sitting just above its 200-DMA after yesterday's steep drop, a level it hasn't been below since early 2025. Will it hold or give way? https://t.co/iULjfpIqWH

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Record weekly inflows into chip ETFs say retail and institutions treated the drawdown as an entry point, and Bloomberg's ETF analyst says that trade has usually paid.

CHIPS AND DIPS: Semiconductor ETFs saw record flows over the past week after an ugly drawdown. Buying the dip here has pretty good record of working and looks like this last one is no dif. $SOXL $SOXX $SMH $DRAM https://t.co/FZtSzGnqtk

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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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Money leaving semis for the market's beaten-down average stock as rates ease is the breadth signal AI-heavy portfolios have been missing.

The S&P 500 Equal Weight ETF $RSP has rallied over the last week, while the semis $SOXX have pulled back. A good way to see market rotation out of AI into other areas that had been extremely weak. Coincides with a minor pullback in interest rates. https://t.co/daeRqwX2UO

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