The iShares Semiconductor ETF (SOXX) entered bear market territory on Friday after falling more than 20% from its record high in June. The ETF was down about 3.5% in Friday’s trading as investors continued to sell AI and chip stocks despite strong earnings from industry leaders such as Taiwan Semiconductor Manufacturing (TSM) and ASML (ASML).
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High conviction NVDA bears now have this Tradr ETFWhat Is SOXX?
SOXX is one of the largest semiconductor exchange-traded funds, with $45.98 billion in assets under management. The ETF holds 31 semiconductor companies, giving investors broad exposure to the chip industry instead of relying on a single stock.
Its biggest holdings include Advanced Micro Devices (AMD), Nvidia (NVDA), Micron Technology (MU), Broadcom (AVGO), and Intel (INTC). Together, the ETF’s top 10 holdings account for about 60% of its portfolio.
Why Is SOXX Falling?
The recent sell-off shows investors have become more cautious about semiconductor stocks. Many have been taking profits after a strong rally in AI stocks. At the same time, expectations for chip companies’ earnings remain very high.
Even strong results from TSMC failed to lift sentiment. The chipmaker reported a record 77% jump in second-quarter profit and raised its full-year outlook. ASML also beat second-quarter estimates and lifted its 2026 sales guidance. Even so, investors focused on higher spending plans and margin pressure. Many are also watching whether AI-driven growth can continue at the same pace.
Is SOXX a Buy Now?
The recent decline has raised concerns. Even so, demand for AI infrastructure remains strong. Growth in cloud computing and data centers should also continue to support the semiconductor industry over the long term.
For investors seeking broad exposure to chip stocks, SOXX offers a simple way to invest in many of the industry’s largest companies instead of betting on a single stock.
According to TipRanks, SOXX has a Strong Buy consensus rating based on 26 Buy, three Hold, and one Sell ratings assigned to its holdings. The SOXX ETF carries an average price target of $714.60, implying 38.49% upside from current levels.
