One of the primary drivers of the Nasdaq 100’s current lackluster performance has been the “elevator up, elevator down” effect from AI infrastructure-related and high memory bandwidth semiconductor stocks that recorded triple-digit returns in the first half of 2026.
Right now, these stocks are facing an “elevator down” effect due to the unwinding of a significant amount of leveraged long financial products tied to two major global bellwethers, high memory bandwidth semiconductor stocks, South Korea’s SK Hynix and Samsung Electronics, that plummeted by 15.5% and 10.5% for the week of 13 July 2026.
Secondly, the semiconductor landscape is signalling a vital transition in risk appetite from unanchored thematic speculation to strict cash-flow discipline. While near-term corporate earnings confirm that chip demand is blistering, elevated capital expenditure forecasts from suppliers like TSMC have sparked deep anxieties about industry-wide supply overbuilding.
Despite a solid quarterly outlook and strong earnings beat from Taiwan Semiconductor Manufacturing Co. (TSMC), its concurrent higher capital spending forecast triggered a “sell the news” shockwave. Consequently, TSMC’s American Depositary Receipts (ADRs) plummeted 4.5% on Thursday, 16 July 2026.
Thirdly, if tech hyperscalers continue to spend capital aggressively on back-end hardware infrastructure while delaying the commercial execution and monetisation of consumer-facing models (as vividly illustrated by recent product pipeline delays from major players like Google), high-beta growth multiples will be compressed.
Valuation metrics will increasingly demand realised revenue rather than forward capex visibility, putting the tech-heavy Nasdaq 100 at severe risk of mean reversion decline.
Since the start of July 2026, AI infrastructure and high-memory-bandwidth semiconductor thematic benchmark stock indices have been the worst performers among major stock indices
South Korea’s KOSPI was punished with a horrendous month-to-date decline of 17%, and the US PHLX Semiconductor Index recorded a double-digit loss of 11.1% over the same period (see Fig. 1).
Let’s now unpack the relevant technicals.
