Past performance does not predict future results. Informational only, not investment advice.
Semiconductor stocks will decline as software companies cut capex spending, reversing the tailwind that has driven semis higher. This capital rotation from semis to software will pressure semiconductor valuations.
Semiconductor chips will benefit from the AI buildout before the AI bubble bursts. Video generation and AI avatar technology are still in early stages, so the rally has room to run.
Author is taking a large put position on the semiconductor ETF as a bearish hedge, expecting downside movement. The metaphor of 'fire insurance for a burning house' suggests conviction that the sector is in trouble.
Author has placed a $450k bearish bet on semiconductors, suggesting expectation of downside in the semiconductor sector.
The semiconductor ETF has become overvalued with most holdings trading at 40+ forward PE multiples on only 15% revenue growth. The author sold half their position after 4 years because valuations no longer support the hype-driven narrative of endless demand.
Author achieved 464% gains on SMH LEAPS purchased around Halloween, indicating the semiconductor ETF outperformed significantly over the holding period. The post confirms a bullish bet on semiconductor equities was profitable.
End of results.