Semiconductor stocks sold off sharply this week, according to CNBC, with the Philadelphia Semiconductor Index down 8% on the week and 17% for the month, putting its three-month winning streak at risk. The pullback extended across sector funds as well, with the Roundhill Memory ETF (DRAM) falling 17% for the week and the VanEck Semiconductor ETF down 7%.
Even with the retreat, UBS kept its constructive stance on the group. The bank said earnings for Philadelphia Semiconductor Index constituents are expected to rise 92% this year and grow another 40% by 2027. Ulrike Hoffmann-Burchardi, UBS head of global equities, said computing-power demand remains above available supply and that supply-chain capacity limits are unlikely to ease in a meaningful way in the near term.
Barclays' trading desk also pushed back against a more bearish reading of the move, saying it has not seen signs of panic in semiconductor trading and that recent selling looks more like passive deleveraging than a broad investor exit. Still, caution remains. Deutsche Bank strategist Maximilian Uleer raised concerns about the sector outlook and its heavy market weight, while Wells Fargo's Ohsung Kwon said semiconductor sentiment has seen one of its sharpest four-week drops on record.
BlockBeats reported on July 19, citing CNBC, that semiconductor stocks fell sharply this week.
The Philadelphia Semiconductor Index dropped 8% for the week and 17% for the month, putting a three-month run of gains at risk. The selloff also hit sector funds. The Roundhill Memory ETF (DRAM) fell 17% this week, while the VanEck Semiconductor ETF lost 7%.
UBS and Barclays stay constructive
UBS kept a bullish stance despite the pullback. The bank expects earnings for companies in the Philadelphia Semiconductor Index to grow 92% this year and rise another 40% by 2027.
Ulrike Hoffmann-Burchardi, head of global equities at UBS, said demand for computing power remains above available supply, and capacity constraints across the supply chain are unlikely to ease meaningfully in the short term. On that basis, UBS continues to favor the semiconductor sector.
Barclays' trading desk said it has not seen signs of panic in semiconductor trading. In its view, recent selling looks more like passive deleveraging than a wholesale retreat by investors.
Strong industry data, but concerns remain
Data from WSTS showed the global semiconductor market is projected to grow 90% in 2026 and another 27% in 2027. After industry sales rose 106% year over year in April, the increase accelerated to 119% in May.
Deutsche Bank strategist Maximilian Uleer, however, raised concerns about the sector's outlook and its high weighting in the broader market. Wells Fargo's Ohsung Kwon said sentiment in the semiconductor market has seen one of the sharpest declines on record over the past four weeks.
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