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SOXX: Assessing The Value Of Semiconductor Stocks One Year Later


  • SOXX offers market-cap-weighted exposure to 30 semiconductor and semiconductor equipment stocks. With a 22-year history, this ETF has amassed $8.66B in assets under management.
  • SOXX is on fire this year, up over 40% primarily due to improved guidance from big players like Nvidia.
  • However, SOXX's overall fundamentals are weaker compared to a year ago when I issued a strong buy recommendation for SOXQ, a lower-cost alternative.
  • Consequently, I've rated SOXX a hold today, and recommend readers take short-term profits until valuations normalize.
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Laurence Dutton

Investment Thesis

One year ago, I issued a "strong buy" recommendation for the Invesco PHLX Semiconductor ETF (SOXQ), rationalizing that its relatively cheap valuation, high growth rate, and anticipated government aid through the CHIPS and FABS Acts

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The Sunday Investor profile picture

I perform independent fundamental analysis for over 850 U.S. Equity ETFs and aim to provide you with the most comprehensive ETF coverage on Seeking Alpha. My insights into how ETFs are constructed at the industry level are unique rather than surface-level reviews that’s standard on other investment platforms. My deep-dive articles always include a set of alternative funds, and I am active in the comments section and ready to answer your questions about the ETFs you own or are considering.

My qualifications include a Certificate in Advanced Investment Advice from the Canadian Securities Institute, the completion of all educational requirements for the Chartered Investment Manager (CIM) designation, and a Bachelor of Commerce degree with a major in Accounting. In addition, I passed the CFA Level 1 Exam and am on track to become licensed to advise on options and derivatives in 2023. In November 2021, I became a contributor for the Hoya Capital Income Builder Marketplace Service and manage the "Active Equity ETF Model Portfolio", which as a total return objective. Sign up for a free trial today! Hoya Capital Income Builder.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of SPY, SOXQ, MSFT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I/we plan on exiting a long position in SOXQ over the next 72 hours.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (2)

The Sunday Investor profile picture
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I bought a bunch of individual semiconductor stocks on sector weakness in the Fall of 2022, but even then SOXX just seemed too expensive.
I kind of regret that decision.
Maybe I will get it in the next Bear market.
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