The iShares Semiconductor ETF (SOXX) closed Thursday at $514.71, marking eight consecutive red trading sessions—its longest losing streak in 16 years, according to data from Barchart. The $44.7 billion BlackRock fund has fallen nearly 14% from its October high, briefly dipping below $496 before recovering on its heaviest trading volume in months.
- SOXX logged eight straight days of losses, falling nearly 14% from October highs.
- Intel (INTC) dropped over 20% across two weeks, while AMD declined more than 5% intraday on October 14.
- TSMC posted a 68.7% surge in third-quarter profit, yet its US shares still fell 1.8%.
- OpenAI reported annualized revenue near $50 billion, falling short of earlier $70 billion projections.
Big Tech Capex and Macro Pressures Hit Top Chip Holdings
The sell-off has hit the largest holdings within SOXX, which tracks the ICE Semiconductor Index across roughly 30 US-listed companies. Its top 10 positions represent approximately 62% of total assets, led by Advanced Micro Devices (AMD) at 9.47%, Intel (INTC) at 8.56%, Nvidia (NVDA) at 7.83%, Micron Technology (MU) at 7.45%, and Broadcom (AVGO) at 7.30%. Other major positions include Marvell Technology (MRVL) at 4.53%, Analog Devices (ADI) at 4.35%, Texas Instruments (TXN) at 4.20%, KLA (KLAC) at 3.98%, and Qualcomm (QCOM) at 3.95%.
Investor concern stems from slowing revenue projections and macroeconomic headwinds. OpenAI informed investors that its annualized revenue reached approximately $50 billion, missing prior expectations of $70 billion, reflecting broader anxiety over AI monetization as slowing tech revenue targets hit valuations. Concurrently, Broadcom CEO Hock Tan publicly categorized some AI investors as "gamblers."
Macro factors have exacerbated the pullback. September US consumer price index data showed inflation rose 3.7% year-over-year, exceeding forecasts. Traders now price a 92% probability of another interest rate hike by the Federal Reserve this year, driving up borrowing costs as massive debt and capex demands weigh on global capital. Spillover from Asia also pressured sentiment, following a sell-off on South Korea's chip-heavy KOSPI index alongside market share gains by Chinese memory manufacturer ChangXin Memory Technologies (CXMT).
Technical Indicators and Institutional Analysis
Despite fundamental strength—such as Taiwan Semiconductor Manufacturing Company (TSMC) delivering a 68.7% year-over-year jump in third-quarter profit—its US-listed shares slipped 1.8%. Technical charts show SOXX trading beneath its 50-day moving average, with its Relative Strength Index (RSI) dropping to 36, its lowest level since July. Analysts highlight the 0.5 Fibonacci retracement level near $481 as key downside support, while recovery targets require breaking $523, the 50-day moving average near $540, and the 0.236 Fibonacci level at $573.
Analysts at UBS characterized the downturn as "more of a recalibration of expectations than a fundamental break in the AI investment story." JPMorgan strategists similarly noted a potential inflection point, while Goldman Sachs estimates Big Tech will spend approximately $800 billion in capital expenditure this year.
Why It Matters
This prolonged pullback in semiconductor equities highlights a growing divergence between record enterprise infrastructure spending and immediate valuation expectations. With Big Tech committing nearly $800 billion to capital expenditures, chip demand remains structurally intact despite short-term earnings misalignments. However, rising interest rate expectations and elevated capital costs mean macro liquidity—rather than raw silicon demand—may determine near-term price direction across both traditional tech and digital asset markets.
