Semis crater, extending annual losses versus S&P 500 to more than 15%

It’s another awful day for semiconductor stocks, both outright and relative to the S&P 500. The VanEck Semiconductor ETF is down nearly 4% as of 12:15 p.m. ET, nearly twice as much as the benchmark US stock index.

Chips have gone from market leader to laggard real quick. The AI trade has had its legs kicked out from under it, and semiconductor demand outside of that high-flying segment hasn’t been able to stand on its own two feet.

Broadcom is off more than 5%, losing most of its post-earnings gains, while Marvell Technology and Microchip Technology are doing even worse. Semi kingpin Nvidia is also down more than 4% on the session.

The chip-centric fund is now trailing the S&P 500 by more than 15% over the past year. Since the launch of the ETF in late 2011, it’s been rare for semis to lag the benchmark US stock index by much more than this over a one-year period, which may hint at a relative bottom. On the other hand, we’ve seldom seen the degree of colossal outperformance that a handful of chip stocks have been able to deliver in recent years.

Broadcom, Nvidia, TSMC, Analog Devices, and Texas Instruments are the only five out of 25 components in SMH to deliver a positive return over the past 252 sessions; on the other side of the spectrum, Intel and AMD have shed over half their value during this span.