"If you stuck with the semiconductors through 2025, you're sitting on a market-beating gain on the year, with the VanEck Semiconductor ETF ( NASDAQ:SMH) now sitting up just over 48% for 2025. Undoubtedly, if you panicked over Dr. Michael Burry (the brilliant doctor who made a fortune betting against the housing market ahead of the Great Financial Crisis) and his bearish views of AI and the semiconductor scene in general, you might have missed out on the run."
"Though 2026 might be the year that the semiconductors give back the gains (and perhaps then some, especially if Burry is right about AI being in a bubble), I certainly wouldn't buy put options or go short any of the names, given the dynamics in play and the big changes that could be in the cards for the firms spending so much on the revolutionary technology."
"Consider shares of the European EUV lithography equipment maker ASML ( NASDAQ:ASML), which stands out as one of Bank of America's most enticing top picks for the new year. Given ASML is pretty much the only game in town as far as high-end lithography machines go, the stock stands out as an essential semi equipment play for semi investors to consider, especially those that are heavier on the more obvious plays in the space (think the GPU makers)."
Semiconductor stocks delivered strong returns in 2025, with the VanEck Semiconductor ETF (SMH) up just over 48%. Panic over Dr. Michael Burry's bearish views on AI and semiconductors may have caused some investors to miss the rally. A meaningful correction in 2026 remains possible, particularly if AI proves to be overvalued, but selling short or buying puts is discouraged given current industry dynamics and heavy capital spending on AI-related technology. Semiconductor equities are cyclical and tend to move together, yet selectively valued names such as ASML provide essential exposure to high-end EUV lithography equipment.
Read at 24/7 Wall St.
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