Are Chips Losing Their Edge to Software Stocks?

2023년 9월 11일

Semiconductor stocks have surged this year, thanks in large part to NVDA Nvidia. But they could be losing relative strength to software makers within the technology sector.

Today’s main chart focuses on the SMH VanEck Semiconductor ETF, which closely tracks the SOX Philadelphia Semiconductor Index. It recently slipped below the 50-day simple moving average (SMA), which may signal weakness over the intermediate term.

The lower study shows its relative strength versus the NDX Nasdaq-100. Notice how it’s mostly lagged the broader index since late June.


Next, consider the same chart and studies for the IGV iShares Software ETF. It’s shown the opposite patterns. Price is above the 50-day SMA and relative strength against the Nasdaq-100 has recently improved.

The last chart compares these two ETFs as a ratio (IGV/SMH). It uses monthly candles to provide a long-term view. Software could be turning up from a 17-year low, which may also suggest relative strength is shifting between these two major groups within the key technology sector.


Standardized Performances for ETF mentioned above:
VanEck Semiconductor ETF (SMH):
1-year: +45.61%
5-years: +186.80%
10-years: +741.25%

iShares Expanded Tech Software ETF (IGV):
1-year: +28%
5-years: +79.25%
10-years: +390.50%
(As of August 31, 2023)

Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision.
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