Just days after suffering their worst monthly decline in nearly 24 years, semiconductor stocks have staged one of the strongest rebounds in history.
The iShares Semiconductor ETF (SOXX) has surged 16.8% over the past four trading sessions, marking its biggest four-day gain since March 2020, when markets rebounded from the pandemic crash.
The rally comes after a brutal July that saw SOXX tumble 21%, its worst monthly performance since December 2002.
Behind that selloff was a combination of aggressive profit-taking following the sector's spectacular first-half rally, forced liquidation tied to the collapse of Leo Aschenbrenner's leveraged fund, and mounting concerns that China's expanding memory industry could eventually pressure pricing.
Yet the rebound suggests investors were quick to view the correction as an opportunity rather than the start of a prolonged downturn.
5 Stocks Driving The Semis Rebound
Collectively, those companies represent more than 30% of SOXX's portfolio, amplifying the ETF's sharp recovery.
The speed of the rebound also aligns with what institutional investors were doing during the selloff.
TradingView fund-flow data showed SOXX attracted a record $6.9 billion of net inflows in July, the largest monthly inflow since the ETF's inception, even as the sector posted its worst month since 2002.
That suggested many investors viewed the decline as a valuation reset rather than a deterioration in fundamentals.
Bank of America semiconductor analyst Vivek Arya shares that view.
In a note published this week, Arya said the recent pullback reflected investors positioning ahead of an eventual memory downturn rather than responding to weakening demand.
He reiterated a Buy rating with a price target of $1,550 on Micron Technology, arguing that even under a severe historical-style collapse in memory prices, the company could still generate earnings of roughly $100 per share.
“We believe potential EPS to remain near $100 — well above prior-cycle peak of ~$12 in 2018,” Arya said.
More broadly, Arya argues the AI investment cycle remains intact.
“Hyperscaler spending continues to rise despite higher component costs, suggesting semis/memory pricing power,” he said.
That view is increasingly supported by corporate earnings.
Recent results from Alphabet, Microsoft and Amazon showed cloud growth accelerating across all three companies, while each reaffirmed or increased AI infrastructure spending.
Amazon raised its 2026 capital expenditure outlook to roughly $220 billion, with CEO Andy Jassy saying the company still lacks enough computing capacity to satisfy customer demand, even at that investment level.
That backdrop helps explain why investors rushed back into semiconductor stocks despite July's historic decline.
.jpeg)
