Stocks

Chip Stocks Flash Extreme Oversold Signals as Bears says More Pain

Semiconductor stocks are showing signs of extreme selling pressure after one of their sharpest losing streaks in years. The Philadelphia Semiconductor Index has plunged approximately 15.7% since October 6, while the Nasdaq-100 recently reached its most oversold four-hour reading in more than a year, according to StoneX strategist James Stanley. Technical relative-strength indicators also show memory giants Sandisk (SNDK) and Micron (MU) firmly in the lagging category.

@fredyyudiawann Oct 18, 2026 · 13:37 UTC

Why it matters

Several prominent market bears have warned that AI stocks could fall further. Investor Michael Burry, famous for predicting the 2008 housing crash, recently disclosed bearish options positions targeting the Nasdaq-100 and VanEck Semiconductor ETF (SMH). Meanwhile, Walter Zimmerman of ICAP Technical Analysis warned that Nvidia's chart was developing a bearish rising-wedge pattern, suggesting weakening momentum.

Chip Stocks Flash Extreme Oversold Signals as Bears says More Pain

Despite the warnings, semiconductor fundamentals remain relatively strong.

TSMC recently reported surging profits, while Goldman Sachs argued that investors may be exaggerating the competitive threat from China's memory manufacturers.

StoneX's James Stanley also noted that deeply oversold conditions have previously been followed by sharp rebounds.

The key question is whether investors are reacting to a temporary interest-rate shock or the beginning of a broader slowdown in AI spending.

For now, the technical picture signals unusually intense selling—not confirmation that the AI boom is over.