The artificial intelligence boom is “eating up the market,” according to BTIG, as the semiconductor and equipment index is now higher by 28% in 2024 and markets haven’t even ended the second month of trading.
The investment institution went on to say that the rally in the sector follows 2023’s 97% gain. If the year were to end today, then the 125% two-year performance would rank second in history behind 1999, which saw a two-year return of +131%, BTIG highlighted.
“The index is now 42% above its 200 DMA, which is the second highest reading in the last two decades with the highest being last June. It doesn’t mean it’s a top, but the trend is certainly stretched,” BTIG stated in an investor note.
Moreover, outlined below are the year-to-date price action for some of Wall Street’s more popular semiconductor focused exchange traded funds.
Direxion Daily Semiconductor Bull 3x Shares (NYSEARCA:SOXL) +27.9%. VanEck Semiconductor ETF (NASDAQ:SMH) +19.3%. iShares Semiconductor ETF (NASDAQ:SOXX) +6.3%. Invesco Semiconductors ETF (NYSEARCA:PSI) +3.9%. SPDR S&P Semiconductor ETF (XSD) -2.9%. Direxion Daily Semiconductor Bear 3X Shares ETF (SOXS) -29.7%.