BLK - SOXX: Wonderful Market Sector Now Trading At An Excessive Price

2024-05-02 06:12:36 ET

Summary

• The semiconductor industry has strong differentiation, financial metrics, and competitive advantages.
• Several popular semiconductor ETFs have outperformed the S&P 500 over the past decade by a wide margin.
• SOXX ETF is trading significantly above trend, indicating potential investor over excitement over AI chip demand, and presenting a significant risk to investors.

One of our favorite corners in the market is the semiconductor industry, as it has a large number of companies with strong differentiation, wonderful financial metrics, and strong competitive advantages. They also tend to have above-average sustainability practices and supply products that in general make life better for all of us....

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