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Semiconductor stocks have been the darling of the stock market in 2023, thanks in large part to rising investor enthusiasm over increased adoption for artificial intelligence (AI) - which depends on specialized chips to deliver those high-powered computing results. And beyond the unavoidable AI headlines, semiconductors are already necessary equipment in everything from your smartphone to your car. In fact, rising auto demand was a key driver behind the ongoing semiconductor shortage in recent years.
However, the semiconductor rally has hit a speed bump this month. After gaining 54% through the first seven months of 2023, the iShares Semiconductor ETF (SOXX) - which tracks the performance of the 30 largest listed semiconductor companies in the U.S. - has tumbled 10.5% so far in August. That said, SOXX is still up 38% YTD, outperforming the Nasdaq Composite's ($NASX) rise of 28% over the same period.
