Thinking About The Semiconductor Pullback And Positioning

The iShares Semiconductor ETF (SOXX) has pulled back 20% from June highs, but this is typical volatility after a 250% rally since April 2025. Semiconductors are in a super-cycle driven by hyperscaler capex, with Google notably raising 2026 and 2027 spending forecasts, supporting further sector upside. Leverage and retail options trading have amplified recent volatility in SOXX, making swift declines more likely but not undermining the sector's fundamental growth. Portfolio diversification remains key; maintain semis exposure but avoid over-concentration, as the cycle is strong but ultimately cyclical and subject to capex shifts.

The semiconductor space is undergoing a bit of a shake out at the moment. If we take the iShares Semiconductor ETF (NASDAQ: SOXX ) as a proxy for the broader ecosystem we see a decline since the highs of