The PHLX Semiconductor Index dropped 20% in recent weeks. NVDA fell 4.2%, AMD lost 3.1%. Hedge funds trimmed positions. Options activity surged at the $195 put strike.
The PHLX Semiconductor Index dropped 20% in the last few weeks, wiping out most of the gains from March through June. NVIDIA fell 4.2% on the session, while AMD slipped 3.1%. The SPDR S&P 500 ETF (SPY) hit resistance near its 50-day moving average, traders said, after failing to hold above the $560 level.
The selloff accelerated after a weak earnings report from a major chip equipment maker, which missed revenue estimates by roughly 3%. The company cited slower orders from memory-chip customers and a pullback in spending on leading-edge tools. Two sell-side analysts cut their price targets on the stock the same day.
NVIDIA now trades at $203.38, up 0.28% on the day but still 18% below its June high. The stock carries an Alpha Score of 69/100, rated Moderate. AMD, with a score of 46/100 (Mixed), underperformed the sector, falling 1.5% more than the index.
A handful of hedge funds trimmed their semiconductor positions last week, according to 13F filings. The largest reduction came from a $12 billion fund that cut its exposure to the group by 15%. The filing showed the fund sold its entire position in one U.S.-listed chip foundry.
Options activity picked up in the final hour of trading. More than 40,000 NVDA puts changed hands, concentrated at the $195 strike for August expiry. That level sits about 4% below the current price. On the call side, open interest at $220 was roughly half the put volume at $195, suggesting a defensive tilt.
Intel and Texas Instruments, two names that had lagged the rally earlier this year, also fell, though by smaller percentages. Intel lost 1.8%; Texas Instruments dropped 1.2%. Both companies report earnings next month.
Taiwan Semiconductor Manufacturing (TSM), down 2.5%, gave back most of its post-earnings gain from July. The stock remains up roughly 30% year to date.
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