Say No To Trading
Public Markets Investor, Opportunistic Buying & Cost-Basis Management
AMD, Arm, Marvell and ON Semiconductor are ultra overvalued and stretched on the monthly timeframe, with no real fundamental change in sight. Their current price ranges may prove good areas for positional shorts into October 2026, in a midterm election year. x.comÂ
Semiconductors look relatively cheap against the S&P 500, while their earnings are growing much faster, barring an EPS reset. The selloff looks overdone, though that does not mean it reverses tomorrow. x.comÂ
onsemi's inventory correction is ending while its AI data center business surges, yet the stock is about 46% below its June 3 high. Distribution inventory fell to 10.1 weeks, fab utilization rose to 83% and lead times stretched from 27 to 32 weeks. The company expects AI data center revenue to more than double in 2026, and management targets another doubling in 2027. onsemi says power content per AI rack can rise from about $15,000 to roughly $115,000 as racks move to high-voltage designs. x.com … Show more
Analog and power semiconductor stocks such as ON Semiconductor, Texas Instruments and NXP are pricing far ahead of their fundamentals. Even with price hikes they are not back to 2022 revenue, yet their share prices have risen multifold. The semiconductor supercycle is lifting even these laggards. x.com x.comÂ
Semiconductor earnings have outpaced prices, making the selloff look more like forced positioning than a broken growth case. Since January 2025, the SOX rose about 114% while reconstructed forward earnings rose about 198%; the estimate is approximate. Hedge funds sold global tech at a greater-than-three-standard-deviation pace in October 5-16, a pattern seen near earlier lows, though another sharp flush could come before a reversal. x.comÂ
ON Semiconductor is back to reasonable multiples after Friday's sell-off tied to Synaptics. Per Mizuho, as many as six analog OEMs are raising prices into the second half of 2026 as demand for select components stays very tight, with NXP, Texas Instruments, Infineon, STMicro and others noting increases of up to 5-30% as AI servers drive demand. x.comÂ
Semiconductor stocks have not priced in a record wave of AI chip demand. Taiwan chip exports jumped over 20% in a single month and demand is 30% above three months earlier, the biggest in history, while Korea is also seeing record semiconductor demand, up 30% on mid-2026. A step change in demand comes while semis are still cheaper than before the AI boom. x.com x.com x.com x.comÂ
AI semiconductor stocks are falling because valuations priced in too much growth beyond 2026-27, not because fundamentals are worsening. With the sector ETF up more than 100% year to date at one point, Q2 earnings couldn't meet those expectations, and a crowded trade is deleveraging as everyone races for the same exit. Fundamentals are likely improving, so as positioning and valuation reset the trade can continue, but selectively. x.comÂ
These ten semiconductor stocks look cheap because each has a PEG ratio near or below 1, meaning growth outpaces valuation. Nvidia's Q1 revenue rose 85% and AMD's 38% with MI350 commitments; Broadcom's AI chip revenue rose 143% with a $73B AI backlog; Marvell's custom silicon doubled. Sandisk has $42B in contracted backlog, Micron's HBM is sold out through 2026, and Coherent, Credo and Applied Optoelectronics ride AI optics demand. ON Semiconductor is the slow-growth value play. x.com x.com x.com … Show more
Semiconductors are hardly overheated given the growth coming to the sector, and a forward P/E of 40 or the mid-40s for semi-cap names is not unreasonable. Some names, such as Intel and AMD, are expensive, but TSMC, Broadcom, Nvidia, ASML and many of the big gainers are hardly extended. x.comÂ