{"success":true,"data":{"id":"3f939b47-7698-4b9c-bbda-127e05abe6a3","title":"Chip stocks enter bear-market territory. A BofA analyst says not to panic.","summary":"Site SearchClear Advanced Search ➔ Symbols No results found - All News - Articles - Video - Podcasts 0 Results No Results Found Authors No results found Sections No results found Columns No results found DJIA\\\\ \\\\ 52146.42\\\\ \\\\ -0.77% S&P 500\\\\ \\\\ 7457.69\\\\ \\\\ -1.01% Nasdaq\\\\ \\\\ 25520.24\\\\ \\\\ -1.","content":"Site SearchClear\n\n[Advanced Search](https://www.marketwatch.com/search?q=) ➔\n\nSymbols\n\nNo results found\n\n- All News\n- Articles\n- Video\n- Podcasts\n\n0 Results\n\nNo Results Found\n\nAuthors\n\nNo results found\n\nSections\n\nNo results found\n\nColumns\n\nNo results found\n\n[DJIA\\\\\n\\\\\n52146.42\\\\\n\\\\\n-0.77%](https://www.marketwatch.com/investing/index/djia?mod=ticker_ribbon)\n\n[S&P 500\\\\\n\\\\\n7457.69\\\\\n\\\\\n-1.01%](https://www.marketwatch.com/investing/index/spx?mod=ticker_ribbon)\n\n[Nasdaq\\\\\n\\\\\n25520.24\\\\\n\\\\\n-1.40%](https://www.marketwatch.com/investing/index/comp?mod=ticker_ribbon)\n\n[VIX\\\\\n\\\\\n18.42\\\\\n\\\\\n10.10%](https://www.marketwatch.com/investing/index/vix?mod=ticker_ribbon)\n\n[U.S. 10 Yr\\\\\n\\\\\n4.554%](https://www.marketwatch.com/investing/bond/tmubmusd10y?countryCode=bx&mod=ticker_ribbon)\n\n[Crude Oil\\\\\n\\\\\n82.17\\\\\n\\\\\n4.08%](https://www.marketwatch.com/investing/future/cl.1?mod=ticker_ribbon)\n\n[Gold\\\\\n\\\\\n4020.30\\\\\n\\\\\n0.71%](https://www.marketwatch.com/investing/future/gc00?mod=ticker_ribbon)\n\n[Bitcoin\\\\\n\\\\\n64026.92\\\\\n\\\\\n-0.14%](https://www.marketwatch.com/investing/cryptocurrency/btcusd?mod=ticker_ribbon)\n\n# Chip stocks enter bear-market territory. A BofA analyst says not to panic.\n\n## The semiconductor sector is undergoing a reset and has a tendency to underperform in the third quarter\n\nFollow\n\nJuly 17, 2026, 4:01 p.m. ET\n\nAdd us on Google\n\nChoose MarketWatch as a preferred source of financial news\n\nResize\n\n![The PHLX Semiconductor Index was falling again on Friday.](https://images.mktw.net/im-15629837?width=1260&height=900)The PHLX Semiconductor Index was falling again on Friday. Photo: Getty Images\n\n- [SOX\\\\\n\\\\\n  -1.63%](https://www.marketwatch.com/investing/index/sox?mod=refsymb_mw)\n\n- [SPX\\\\\n\\\\\n  -1.01%](https://www.marketwatch.com/investing/index/spx?mod=refsymb_mw)\n\n- [AVGO\\\\\n\\\\\n  -0.97%](https://www.marketwatch.com/investing/stock/avgo?mod=refsymb_mw)\n\n- [AMD\\\\\n\\\\\n  -1.03%](https://www.marketwatch.com/investing/stock/amd?mod=refsymb_mw)\n\n- [INTC\\\\\n\\\\\n  -2.00%](https://www.marketwatch.com/investing/stock/intc?mod=refsymb_mw)\n\n- [NVDA\\\\\n\\\\\n  -2.21%](https://www.marketwatch.com/investing/stock/nvda?mod=refsymb_mw)\n\n- [MU\\\\\n\\\\\n  -0.50%](https://www.marketwatch.com/investing/stock/mu?mod=refsymb_mw)\n\n- [SNDK\\\\\n\\\\\n  -3.99%](https://www.marketwatch.com/investing/stock/sndk?mod=refsymb_mw)\n\n- [STX\\\\\n\\\\\n+5.66%](https://www.marketwatch.com/investing/stock/stx?mod=refsymb_mw)\n\n- [WDC\\\\\n\\\\\n+2.23%](https://www.marketwatch.com/investing/stock/wdc?mod=refsymb_mw)\n\n- [2330\\\\\n\\\\\n  -7.29%](https://www.marketwatch.com/investing/stock/2330?countryCode=tw&mod=refsymb_mw)\n\n- [005930\\\\\n\\\\\n  -8.77%](https://www.marketwatch.com/investing/stock/005930?countryCode=kr&mod=refsymb_mw)\n\n- [ASML\\\\\n\\\\\n  -2.09%](https://www.marketwatch.com/investing/stock/asml?mod=refsymb_mw)\n\n- [AMAT\\\\\n\\\\\n  -5.57%](https://www.marketwatch.com/investing/stock/amat?mod=refsymb_mw)\n\n- [KLAC\\\\\n\\\\\n  -3.02%](https://www.marketwatch.com/investing/stock/klac?mod=refsymb_mw)\n\n- [LRCX\\\\\n\\\\\n  -2.39%](https://www.marketwatch.com/investing/stock/lrcx?mod=refsymb_mw)\n\nAs the chip sector falls into bear-market territory, a BofA analyst says the recent pressure is merely “a summer reset, not a fundamental reversal.”\n\nIt’s been a volatile stretch for the sector, with the PHLX Semiconductor Index\n\n[SOX\\\\\n\\\\\n-1.63%](https://www.marketwatch.com/investing/index/sox?mod=article_chiclet)\n\nnow on track to close in a bear market after seeing explosive gains in the first half of the year. To officially enter a bear market, defined as a drop of 20% or more from a recent significant peak, the index needs to close at 11,707.78 or below, according to Dow Jones Market Data. The index is at 11,675.18 late in the regular session.\n\nThe index, which trades under the ticker symbol “SOX,” saw choppy trading action in Friday’s session, falling as much as 5.7% before briefly swinging into positive territory for the day. It was recently off about 1%.\n\nBank of America analyst Vivek Arya attributed recent declines both to fundamental concerns about cost inflation in memory chips and to “seasonal mood swings” for the SOX, which he said has underperformed the S&P 500\n\n[SPX\\\\\n\\\\\n-1.01%](https://www.marketwatch.com/investing/index/spx?mod=article_chiclet)\n\nin the third quarter for 10 of the last 16 years. The underperformance comes on the heels of an 80% gain for the sector in the second quarter of this year, he said in a Thursday note.\n\nArya said he remains upbeat about semiconductor, networking and chip-equipment stocks, and he still expects artificial-intelligence spending to more than double to $1.7 trillion by the end of the decade.\n\n**See more:** [Apple’s stock is beating the S&P 500 by a remarkable degree — and it may have more room to run](https://www.marketwatch.com/story/apples-stock-is-beating-the-s-p-500-by-a-remarkable-degree-and-it-may-have-more-room-to-run-1b0a1454?mod=article_inline)\n\nShares of Broadcom\n\n[AVGO\\\\\n\\\\\n-0.97%](https://www.marketwatch.com/investing/stock/avgo?mod=article_chiclet)\n\nand Advanced Micro Devices\n\n[AMD\\\\\n\\\\\n-1.03%](https://www.marketwatch.com/investing/stock/amd?mod=article_chiclet)\n\nwere down more than 1% on Friday afternoon, while shares of Intel\n\n[INTC\\\\\n\\\\\n-2.00%](https://www.marketwatch.com/investing/stock/intc?mod=article_chiclet)\n\nand Nvidia\n\n[NVDA\\\\\n\\\\\n-2.21%](https://www.marketwatch.com/investing/stock/nvda?mod=article_chiclet)\n\nwere off about 2%.\n\nThe Friday declines were partly being driven by concerns over the release of Kimi K3 from Chinese AI model developer Moonshot AI. The 2.8-trillion-parameter open-weight model performs comparably to Anthropic’s Fable 5 and OpenAI’s GPT-5.6 Sol and is at an advantage due to its cheaper price, Jefferies analyst Matt Ma said in a Friday note.\n\n“Whatever gap existed between American and Chinese frontier AI just got a lot smaller, and it happened on the exact morning Wall Street was busy convincing itself AI economics don’t add up,” Mark Malek, chief investment officer at Siebert Financial, said in emailed comments.\n\nMeanwhile, Micron Technology’s stock\n\n[MU\\\\\n\\\\\n-0.50%](https://www.marketwatch.com/investing/stock/mu?mod=article_chiclet)\n\nwas up fractionally, while Sandisk’s stock\n\n[SNDK\\\\\n\\\\\n-3.99%](https://www.marketwatch.com/investing/stock/sndk?mod=article_chiclet)\n\nfell about 1.5%. Storage makers Seagate Technology\n\n[STX\\\\\n\\\\\n+5.66%](https://www.marketwatch.com/investing/stock/stx?mod=article_chiclet)\n\nand Western Digital\n\n[WDC\\\\\n\\\\\n+2.23%](https://www.marketwatch.com/investing/stock/wdc?mod=article_chiclet)\n\nsaw their stocks rise 6.2% and 2.5%, respectively, on Friday.\n\ncontent frame\n\n**An error has occurred**\n\n### Become a more knowledgeable investor today\n\nUnlock this introductory offer to make the most of your money with personalized financial insight from MarketWatch, starting at £2 every 4 weeks.\n\nSpending on memory chips accounts for about 35% to 40% of hyperscaler capital expenditures, Arya said, which is two to three times higher than it has been historically.\n\nHe expects both spot and contract pricing for memory components to remain durable in the current quarter and noted that spot prices for dynamic random-access memory have climbed for eight straight weeks, while pricing for NAND flash memory has also been stronger.\n\n**Don’t miss:** [Micron has turned into ‘the most important stock in the market.’ So is it time to worry?](https://www.marketwatch.com/story/micron-has-turned-into-the-most-important-stock-in-the-market-so-is-it-time-to-worry-71e335bf?mod=article_inline)\n\nAdditionally, Arya said improved visibility into a multiyear cycle for AI infrastructure supports his expectations for the wafer fab equipment market to reach $190 billion in revenue in 2027, and $250 billion in 2028.\n\nAfter Taiwan Semiconductor Manufacturing\n\n[2330\\\\\n\\\\\n-7.29%](https://www.marketwatch.com/investing/stock/2330?countryCode=tw&mod=article_chiclet)\n\nraised its U.S. investment commitments to $265 billion, Arya said that “could further pressure” both Intel and Samsung Electronics\n\n[005930\\\\\n\\\\\n-8.77%](https://www.marketwatch.com/investing/stock/005930?countryCode=kr&mod=article_chiclet)\n\nto increase U.S. spending, too. Additionally, ASML’s\n\n[ASML\\\\\n\\\\\n-2.09%](https://www.marketwatch.com/investing/stock/asml?mod=article_chiclet)\n\nguidance for shipments of its deep-ultraviolet lithography and extreme-ultraviolet lithography machines to grow more than 30% annually in 2027 and 2028 — along with anticipation of price hikes for those products — provides a tailwind for the broader semicap sector, he said.\n\nShares of Applied Materials\n\n[AMAT\\\\\n\\\\\n-5.57%](https://www.marketwatch.com/investing/stock/amat?mod=article_chiclet)\n\nwere down 5.4% on Friday afternoon, while shares of KLA\n\n[KLAC\\\\\n\\\\\n-3.02%](https://www.marketwatch.com/investing/stock/klac?mod=article_chiclet)\n\nwere down 3% and Lam Research’s stock\n\n[LRCX\\\\\n\\\\\n-2.39%](https://www.marketwatch.com/investing/stock/lrcx?mod=article_chiclet)\n\nwas off 2.9%.\n\nCopyright ©2026 MarketWatch, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8\n\nAbout the Author\n\nFollow\n\nBritney Nguyen is a tech reporter covering Nvidia, chips and AI. You can find her on X at @britneycath.\n\nShow Conversation (0)\n\n## What to Read Next\n\nproducts.gobankingrates.com\n\n# products.gobankingrates.com is blocked\n\nThis page has been blocked by an extension\n\n- Try disabling your extensions.\n\nERR\\_BLOCKED\\_BY\\_CLIENT\n\nReload\n\ncontent frame\n\n# Unlock this article with Google\n\nGoogle is providing you with complimentary access to this MarketWatch article. Choose an option to start reading.\n\n[![](https://www.wsj.com/asset/piano/wsj/img/google-logo.svg)\\\\\n\nor\n\nAlready have a MarketWatch account?","source_name":"MarketWatch","source_url":"https://www.marketwatch.com/story/chip-stocks-enter-bear-market-territory-a-bofa-analyst-says-not-to-panic-4d34df17?mod=mw_rss_topstories","url":"https://www.marketwatch.com/story/chip-stocks-enter-bear-market-territory-a-bofa-analyst-says-not-to-panic-4d34df17?mod=mw_rss_topstories","author":"Britney Nguyen","author_name":"Britney Nguyen","published_at":"2026-07-17T20:01:00.000Z","publication_date":"2026-07-17T20:01:00.000Z","image_url":"https://images.mktw.net/im-15629837/social","category":"markets","topic":"markets","tags":[],"political_bias":null,"bias_score":null,"confidence_score":null,"credibility_score":null,"factual_quality":null,"reading_time":6,"word_count":1021,"view_count":0,"breaking":false,"breaking_news":false,"ai_analysis":null,"fact_check_status":"unverified","archive_status":"hot"}}