This is not the first correction $SMH semiconductors ETF is going through
Source: Trend Spider
The semi-conductor foundry landscape
Source: Statista
Meanwhile: The tech sector now represents 44% of the S&P 500 index when including Amazon, Alphabet, and Meta.
The pendulum has probably swung too far in one direction, and investors are running out of ideas to justify these historical distortions. Source: Tavi Costa, Bloomberg
Netflix, $NFLX, officially kicks off big tech earnings season with a MASSIVE swing in price.
The stock just swung over 10% in a matter of minutes after reporting results. The company reported Q2 2024 EPS of $4.88, above expectations of $4.76. They also added 8.05 million subscribers, crushing expectations of 4.5 million. Big tech earnings season has officially begun. Source: The Kobeissi Letter
We just saw the largest selloff in the semi-conductors SOX index since the pandemic crash
It is taking place at the time valuations are at record high (see below price-to-sales in the chart underneath) Source: Bloomberg, Tavi Costa
Will this time be different?
Source: BofA
Sox plunged 6.8% in semi conductor sector's worst selloff since March 2020
on the prospect of increased export restrictions on advanced semiconductor technology, and by Donald Trump's latest comments on Taiwan. Taiwan "did take about 100% of our chip business" and "should pay us for defense," Trump said in a Bloomberg Businessweek interview. Intel and GlobalFoundries bucked the trend as potential US domestic semi 'winners.' Source: Bloomberg, HolgerZ
For context, the four-day reversal in the Nasdaq 100 / Russell 2000 ratio is the greatest shift in the US Big-Tech / small cap pair since the collapse of the DotCom bubble...
Source: Bloomberg, www.zerohedge.com
