Glitch
Founder of Skylit
Memory stocks are best avoided as semiconductors turn bearish, with every pop getting sold and rotations under way. Micron is headed to 900 as expected, with options flow showing nothing but bearish bets through its gap up, and the semiconductor index and Micron have gapped down. The warning covers Micron, Sandisk, the DRAM ETF and Penguin Solutions. x.com x.comÂ
Tech and semiconductor bounces are mainly driven by less urgent hedge-fund selling rather than fresh buying. Per Goldman Sachs, tech is still being sold amid very low activity; there is no sign risk has been added yet. The unwind may be nearing its end, especially as hyperscalers stick to capex plans and Q3 semiconductor earnings look likely to be positive. Less crowded positioning and more normal multiples leave a healthier base for a longer-term rebuild. x.comÂ
Semiconductor stocks face more unwinding because they are overcrowded, highly margined growth-at-any-cost positions, and that should continue until semi and AI chatter on X dies down. Underowned, lower-volatility areas such as regional banks, transports, medical devices and homebuilders are ripping, partly on earnings and partly on broad rotation. x.com x.comÂ
Some semiconductor stocks have returned to reasonable valuations as fundamentals improve, making recent declines buying opportunities. Many had traded at two to three times their median valuations; the correction brought some back toward normal, while sustained AI spending should benefit suppliers for years. x.comÂ
The sharp rebound in semiconductor and memory stocks does not confirm a durable bottom; many may stall below prior highs and form lower highs, making this a reflexive bounce within a broader correction. Unlike IREN and CoreWeave, semis and memory have not reached compelling valuations, and the backdrop is poor, with the 30-year yield higher and GDP estimates below expectations. The broader AI infrastructure theme remains extremely bullish. x.comÂ
The semiconductor sector's bloat makes selectivity important. Nvidia, TSMC and ASML are among the best businesses still worth owning, but not every name will recover from this month's selloff. Chasing unprofitable, highly leveraged small caps should be a lesson from the selloff. x.comÂ
Semiconductor fundamentals have improved as SpaceX and Meta say spending will rise further, while rates have come down. Earlier caution rested on fears that megacaps could not sustain spending and rising rates would slow AI investment; neither worry has played out. Today's selling feels more like stops being hit and investors giving up. x.com x.comÂ
Semiconductor hardware leaders are correcting in Q3 because of mechanical rebalancing, not a fundamental collapse. After H1 2026 gains such as Micron's 301% and Intel's 257%, index funds, target-date portfolios and risk-capped active managers must trim winners and buy laggards. With passive funds over 55% of US fund assets and the top 10 S&P 500 stocks about 35% of the index, even a 2-3% trim in a few giant chip names frees tens of billions to rotate into mid-cap, value and cyclical stocks. … Show more
The Magnificent Seven's growth, fortress balance sheets and central role in the AI buildout now come at multiples that finally make sense. They have barely bent when high-beta names lose 10% in a session; that resilience makes their valuations down here one of the better opportunities in this market. x.comÂ
Massive moats and great profit margins make solid semiconductor names worth buying on the dip. x.comÂ
The semiconductor playbook that worked in 2025 and the first half of 2026 will likely fail from here. The era of bottlenecks, when five years of fundamentals were priced in within five weeks, is over, and so far a V-shaped recovery in AI and semis is not taking place. The cooling is probably healthy and calls for patient stock picking across subniches, with valuations hopefully mattering more. If the old regime returns, a more aggressive stance would fit again. x.comÂ