SMH

The Week

SMH.US fell 4.32% this week to close at $603.33, underperforming the S&P 500 by about 5.47 percentage points as the benchmark gained 1.15%. The week unfolded as a failed rally: the ETF opened Monday at $631.47, hit a high of $639.47 on Tuesday, then slid through the rest of the week, with Thursday’s low touching $600.315 before settling at $603.33 on Friday. Weekly amplitude came in at 6.2%. Volume was steady, averaging about 6.51 million shares a day, broadly in line with the recent median. The latest price remains above both the 20-day moving average near $597 and the 60-day line near $574.

Sector News

Semiconductor news this week was split between constructive announcements and a check on AI spending expectations. Applied Materials and Intel’s collaboration on AI chipmaking technology remained in focus, GlobalFoundries signed a $2 billion AI packaging deal with TSMC, and its Dresden site unveiled a next-generation platform for physical AI. At the same time, OpenAI’s reduced revenue outlook rattled the sector: the Philadelphia Semiconductor Index dropped more than 3% at one point, with SanDisk down 5%. Citi noted AI capex is still expanding but profit outlooks are diverging. On the single-stock side, Marvell received multiple price-target hikes, and Micron’s 10-K showed FY2026 revenue of $133.19 billion with EPS of $74.33.

The Week Ahead

Macro data dominates the calendar next week. Tuesday brings the NFIB small business optimism index and existing home sales; Wednesday’s CPI and core CPI prints, with core CPI expected at 2.5% against a prior 2.4%, will offer fresh clues on the inflation and rate path. Beyond macro, the AI spending debate triggered by OpenAI’s revised revenue figure, along with market discussion of Micron’s December buyback plan, is likely to carry into next week. How AI capex holds up and whether the sector stabilises after this pullback remain the key watch-points.

In Short

This week’s tension sits between sector-level support and a re-rating of AI spending assumptions. Collaborations and price-target hikes provided a floor, but OpenAI’s revenue revision raised doubts about the durability of AI investment, weighing on valuations. The latest session’s large-lot money turned net seller while smaller flows took the other side, leaving fund direction mixed. The path from here hinges on next week’s CPI data and any marginal shift in AI capex expectations; the sector needs macro data and earnings outlooks to align before it can rebuild an up-trend.

This article is generated by LongbridgeAI from market data, for information only and not investment advice.