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LivestreamMenuSemiconductor stocks have room to fall, Vivek Arya at Bank of America believes. The noted chip analyst sees a risk that the benchmark PHLX semiconductor index ( SOX ) might fall as much as 10%, according to a Monday report to clients. A decline of that size would extend two months of declines and bring the index back to a valuation relative to the S & P 500 unseen since the launch of the ChatGPT chatbot back in 2022. Technical factors, political pushback and financing concerns are all threatening the index, which has nearly doubled in value over the past year during the artificial intelligence boom. “Headwinds could cap chip stocks near-term,” Arya wrote, citing “rising rates, data-center backlash [and] circular financing” in addition to the fact that “chips are heavily owned, 13% overweight vs. SPX.” Before the launch of ChatGPT, the price-to-earnings multiple of the SOX trailed the S & P’s by about 9%, according to Arya’s calculations. As the AI boom caught fire over the past four years, that discount turned into a 15% premium over the S & P. But the PE multiples of the two indexes have equalized in recent months, with both now selling at about 20 times earnings. With companies in the SOX growing forward earnings per share at an annual rate of about 70%, Arya thinks the SOX multiple looks like a bargain. “Seasonality is strongly bullish, and SOX valuation (20x forward PE) looks cheap against a 70% EPS [compound annual growth rate],” he wrote. Bank of America flagged “enhanced buy opportunities” in chip stocks including Nvidia , Marvell Technology , Micron , Lam Research , Advanced Micro Devices , Intel , Analog Devices and ON Semiconductor . Among the downside risks for Nvidia, which reports earnings after the market closes Wednesday, are the “potential for decelerating capital returns” and “lumpy and unpredictable sales” in new enterprise markets, Arya said. Marvell could see “faster than anticipated ramp/visibility” for its major custom AI chip projects, he said. .SOX mountain 2026-06-30 PHLX SOX semiconductor index since June 30Read More
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