Semiconductor ETF’s Brutal July Ends With a Thin Silver Lining — and a 125% Annual Gain Still Intact

The iShares MSCI Global Semiconductors UCITS ETF limped into the weekend with a modest 0.27 percent gain, closing Friday at EUR 16.27. It was a small mercy after a month that wiped nearly a fifth off the fund’s value — but it does little to mask the disconnect at the heart of the chip trade right now.

On a 30-day basis, the fund is down 17.90 percent, its sharpest correction in years. The weekly loss stands at 5.77 percent. Yet zoom out and the picture transforms dramatically: the ETF remains up 70.30 percent since the start of the year and 125.87 percent over the past twelve months. The fund currently trades 24.39 percent below its record high of EUR 21.52, set on June 22.

Cloud capex provides the Friday floor

The stabilization at the end of the week came courtesy of the hyperscalers — the biggest buyers of high-end AI silicon. Amazon lifted its 2026 investment budget to $220 billion, following a surge in AWS’s backlog to nearly $500 billion. Microsoft, meanwhile, reported 43 percent revenue growth in its Azure cloud division, pushing that unit’s annual sales past the $100 billion mark for the first time.

Those numbers matter because they address the market’s central anxiety: that the AI infrastructure buildout might be losing momentum. For semiconductor investors, they offered a reason to step back in after a July defined by valuation jitters.

The technical picture supports a cautious read. The fund sits comfortably above its 200-day moving average of EUR 13.04 but 12.35 percent below the 50-day average of EUR 18.57 — a spread that suggests the long-term uptrend remains intact while the short-term correction dominates. The RSI reads 41.6, pointing to neutral-to-slightly-oversold conditions.

A tale of two chip segments

Beneath the index level, the divergence between chip categories is stark.

Intel delivered second-quarter revenue of $16.1 billion, up 25 percent year-over-year — its strongest growth in over fifteen years — driven by a 59 percent jump in its data center and AI division. Roth Capital and Wells Fargo both responded by lifting their price targets on the stock to $120.

Memory chip makers tell a different story. SK Hynix posted record operating profit of around KRW 60.5 trillion and net income of approximately KRW 93.9 trillion, yet the stock still came under pressure as delivery delays missed some analyst expectations. Add to that the rise of Chinese competitor CXMT, which grew its DRAM market share from 3 to 8 percent within a year, squeezing incumbents like Micron and Samsung.

Should investors sell immediately? Or is it worth buying iShares MSCI Global Semiconductors UCITS ETF USD Acc?

The broader sell-off at the end of July was brutal across the sector. Intel lost nearly 6 percent in a single session, AMD dropped 8 percent, Sandisk fell 14 percent, Western Digital shed close to 7 percent, and both Micron and Seagate lost more than 8 percent. In Asia, SK Hynix closed 14.65 percent lower and Samsung Electronics fell over 13 percent.

Record numbers, falling prices

The irony is that the fundamentals have rarely looked stronger. Global semiconductor sales hit an all-time high of $120.6 billion in May 2026, up 104.1 percent year-over-year — the fifteenth consecutive record month. Broadcom expects AI chip revenue to grow over 200 percent to $16 billion this quarter, and Micron is guiding toward quarterly sales of $50 billion.

Micron’s own results capture the paradox perfectly. The company reported third-quarter revenue of $41.46 billion, up 345.7 percent year-over-year and well ahead of analyst estimates. Adjusted earnings per share came in at $25.11 versus an expected $20.28. CEO Sanjay Mehrotra called it a record quarter with an even stronger outlook ahead. The stock still lost over 24 percent within a month.

The concern driving that reaction: memory chip prices may peak as early as 2027. Sundeep Gantori, Chief Investment Officer for Equities at Standard Chartered, points to broker reports flagging that peak, combined with media coverage of China’s ambitions in memory chips and lithography equipment, as the trigger for the nervousness. At current valuations, the mere prospect appears enough to prompt selling.

Rotation, not capitulation

Institutional voices remain largely constructive. HSBC characterized the late-July decline in semiconductor stocks on July 31 as a rotation rather than capitulation, arguing the AI investment cycle remains intact. Morgan Stanley projects the cloud AI semiconductor market could grow to $485 billion by 2026.

Friday also brought some relief from an orderly unwinding of “Situational Awareness,” a heavily leveraged AI hedge fund. Market observers attributed the easing selling pressure to other major financial institutions managing an orderly exit from its positions.

Two events in the coming days could provide further direction. Sandisk reports quarterly results on August 5, and Sony’s technology center in Kumamoto resumes operations on August 4 after an earthquake-induced production halt.

Whether the memory price peak materializes in 2027 remains an open question. Until then, the sector looks set to oscillate between record operational numbers and the nagging fear that the cycle’s best days are already priced in.