Semiconductor stocks like AMD and Micron are, without a doubt, solid companies with strong technology and important roles in the global tech ecosystem. However, despite their quality, I'm broadly bearish on the semiconductor sector as a whole right now.
Micron Technology (MU)
Advanced Micro Devices (AMD)
In my view, semiconductor valuations have become stretched. Many of these companies are priced for perfection, with market enthusiasm often running far ahead of the underlying fundamentals. I believe a significant portion of the tech sector — particularly semiconductor stocks — is overvalued relative to actual earnings performance, guidance, and macroeconomic conditions.
That’s why I’m not currently looking to buy into semiconductor names, even the strong ones. I'm waiting for a better entry point — one where valuation metrics make more sense and there’s more room for upside. For now, I'm on the sidelines when it comes to going long.
Instead, I’ve taken a contrarian position through SOXS — the Direxion Daily Semiconductor Bear 3X Shares ETF. This is a leveraged inverse ETF that aims to deliver 3x the inverse performance of the semiconductor index. It’s a high-risk vehicle, no doubt, and I’ll admit: I’m currently bagholding it after some tough weeks. But today brought a welcome surprise — a sharp, sudden surge in SOXS, which provided a much-needed boost to my portfolio. I’m not sure what sparked the move, but I won’t complain — green is green.
Direxion Daily Semiconductors Bear 3x Shares (SOXS)
Despite short-term uncertainty, I remain optimistic about SOXS in the current environment. While this is a tactical play rather than a long-term investment, it reflects my broader skepticism about semiconductor valuations and the tech sector's lofty pricing.
As always, timing is key — and for now, I’m comfortable maintaining a bearish stance until the numbers tell a different story.
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