BTIG advises investors to reduce their holdings in semiconductor stocks during any potential market rebound. The firm anticipates a prolonged downturn for the sector that could persist until 2027. This outlook follows an 11.4% weekly decline in the Philadelphia Semiconductor Index, marking its sharpest drop since April 2025.
The iShares Semiconductor ETF has recorded losses for nine consecutive sessions, though it remains up nearly 64% for 2026. BTIG identifies $490 as a critical support level for the ETF. Should the price fall below this threshold, the fund could trend toward its 200-day moving average near $468.
Market technician Jonathan Krinsky notes that historical data provides little reassurance for bulls. Following weekly losses of 10% or more in the Philadelphia Semiconductor Index, the median outcome three weeks later has historically been a decline. Krinsky highlights increasing skepticism surrounding the artificial intelligence sector.
Other institutions have issued similar warnings regarding a potential artificial intelligence bubble. Bridgewater founder Ray Dalio suggests the bubble is nearing a breaking point, while Panmure Liberum expects a market breakdown by 2027 or 2028. The IMF also identified an AI-driven correction as a key global risk.
