Semiconductor stocks haven't been this hot since the dot-com bubble — and it could end badly

The SOX rocks!

The Philadelphia Semiconductor Sector Index (^SOX) — amended known among traders arsenic the SOX — has surged 30% successful the past 13 days. That marks the largest rally of this benignant since 2002, BTIG main marketplace technician Jonathan Krinsky pointed out. The past and lone clip the SOX saw a akin determination into a caller precocious was March 2000, astatine the highest of the dot-com bubble.

The SOX is much than 16% supra its 50-day moving mean and astatine a 52-week high, which is simply a informing flag, Krinsky said. His enactment shows that the SOX has been antagonistic 85% of the clip 5 days later, with a median instrumentality of -3.64% pursuing this signal.

The Philadelphia Semiconductor Sector Index is simply a capitalization-weighted scale composed of the 30 largest US companies progressive successful the design, distribution, manufacture, and merchantability of semiconductors.

It's dominated by a fewer megacap names that service arsenic the instauration for the planetary artificial quality build-out. The 4 largest weightings successful the index, from highest to lowest, are Nvidia (NVDA), Broadcom (AVGO), Micron (MU), and AMD (AMD).

These 4 chips person seen their stocks surge successful April. Memory spot subordinate Micron has gained 41%, Broadcom is up 38%, AMD is up 242%, and Nvidia has tacked connected 22%.

Besides axenic momentum, the assemblage has precocious gotten a jolt of bully news.

Taiwan Semiconductor Manufacturing Company (TSM) delivered an awesome commencement to the twelvemonth contempt war-related uncertainty.

First 4th gross surged 35% twelvemonth implicit twelvemonth to a grounds 1.134 trillion New Taiwan dollars (about $35.6 billion). This marked the archetypal clip the foundry giant's quarterly income had crossed the trillion-dollar threshold successful section currency. Results importantly surpassed the precocious extremity of its ain erstwhile guidance.

Sales successful March jumped 45% to astir $13 billion, hinting that the AI supercycle is entering an adjacent higher gear.

TSMC shares are up 17% successful April.

"We are seeing nary cracks successful AI request connected the chips/hardware oregon bundle beforehand which gives america a agleam greenish airy to ain the halfway tech winners heading into 1Q net season," Wedbush tech expert Dan Ives said successful a note.

Brian Sozzi is Yahoo Finance's Executive Editor and a subordinate of Yahoo Finance's editorial enactment team. Follow Sozzi connected X @BrianSozzi, Instagram, and LinkedIn. Tips connected stories? Email [email protected].

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