MW The historic surge in chip stocks highlight's Micron's valuation, and a related warning
By Britney Nguyen and Philip van Doorn
The iShares Semiconductor ETF has rocketed 34% amid a long winning streak - its best 13-day stretch in 24 years
Micron's revenue is expected to decline in 2028.
The broad stock market has soared into record territory, more than erasing the weakness seen following the attack on Iran by the U.S. and Israel, and the coincident gains of semiconductor stocks have been breathtaking. But within the valuation data for the red-hot chip sector, there is a warning for investors in a hot pocket of an industry that has been cyclical for decades.
Here are this year's total returns for the iShares Semiconductor ETF SOXX and the State Street SPDR S&P 500 ETF Trust SPY, with dividends reinvested, through Thursday:
Through April 17, the iShares Semiconductor ETF returned 34.9% for 2026, while the SPDR S&P 500 ETF Trust returned 3.2%.
SOXX tracks the PHLX Semiconductor Index SOX, while SPY tracks the S&P 500 SPX by holding all of its stocks weighted by market capitalization. Both groups of stocks wiped away any semblance of their declines into late March, with the S&P 500 and SOXX setting new records this week.
One reason chip stocks have performed so well is that analysts' profit estimates for the group have been increasing so quickly.
The SOXX was on track to be up for 13 consecutive sessions - its longest winning streak since June 11, 2024, when it climbed for 15 straight trading days, according to Dow Jones Market Data. The 34.1% gain during that streak is also its best 13-day stretch since Nov. 4, 2002, the data showed.
History suggests that investors shouldn't worry that a long winning streak could signal a buying climax at the end of a bull market.
Since the SOXX's inception in July 2001, there have been four winning streaks of double-digit days, with the last two occurring in line with the bull market that ran from late 2015 to early 2018.
Buying into the chip sector at the end of those streaks still netted nice gains for investors. After a 10-day streak that ended on June 3, 2016, the SOXX rose 105% until the end of the bull market on March 12, 2018. And after its 11-day streak that ended on Oct. 11, 2017, the SOX rose another 19.4% until the end. (The end of a bull market, in this case, is defined as the start of a decline of more than 20% from peak to bottom.)
What the P/E ratios say about the SOXX's biggest
Here is a look at forward price/earnings valuations for the 10 largest SOXX holdings as of Thursday's close. The PHLX Semiconductor Index follows a modified cap-weighting strategy, with the largest five components limited to 8% of the index and the remaining holdings limited to 4% when it and SOXX are rebalanced quarterly.
A stock's forward P/E ratio is its price divided by the consensus 12-month earnings-per-share estimate among analysts polled by LSEG. The table shows this year's changes in the stocks' prices and the following 12-month earnings estimates.
Company Forward P/E Forward P/E as of Dec. 31 2026 price change Increase in rolling 12-month EPS estimate Broadcom 27.0 31.9 15% 36% Nvidia 21.7 24.5 6% 20% Micron Technology 5.5 7.9 60% 132% Advanced Micro Devices 33.1 33.1 30% 30% Marvell Technology 31.5 24.0 57% 20% Applied Materials 31.1 26.0 52% 27% Intel 87.3 61.2 86% 30% Monolithic Power Systems 60.6 43.8 55% 12% Teradyne 52.7 36.7 89% 32% KLA 37.0 31.0 43% 20% Source: LSEG
All of these stocks were up 2026 through Thursday, while the rolling consensus 12-month EPS estimates had increased by at least double digits for all. But the top three on the list stand out because their forward P/E ratios have declined despite the increases in their share prices. The rolling consensus 12-month EPS estimates have increased even more.
Micron $(MU)$ has stood out the most, with its rolling 12-month consensus EPS estimate increasing 132% since the end of last year. Micron's forward P/E has declined to 5.5. This is a very low valuation when compared with a forward P/E of 20.1 for the S&P 500 and 22.5 for SOXX, as calculated by LSEG.
Read: Intel's stock has been 'absolutely on fire.' Now it needs to deliver on the hype.
Revenue growth projections - the Micron warning
Price/earnings ratios reflect profit expectations for the following 12 months. But investors with a longer-term horizon will also be interested in sales-growth projections. Consensus sales estimates are available through 2028 for 28 of the SOXX 30 companies.
The sales estimates are adjusted for calendar years for companies (such as Nvidia) with fiscal reporting periods that don't match the calendar.
Since one might expect sales-growth expectations for 2026 to be reflected in the stock prices already, we've looked at projected compound annual growth rates (CAGR) for the companies' sales from calendar 2026 through 2028.
For all 28 companies, revenue is expected to increase in 2027. But for 2028, Micron is the only one for which revenue is expected to decline.
The consensus calendar 2026 revenue estimate for Micron is $130.65 billion, with analysts expecting the company's sales to increase by 33% in calendar 2027 to $174.02 billion, then decline by 10% in calendar 2028 to $156.71 billion. Those numbers translate to a projected revenue CAGR of 9.5% for the manufacturer of computer memory chips from calendar 2026 through 2028, compared with a weighted projected revenue CAGR of 17.8% for the S&P 500 information technology sector and 7.5% for the full S&P 500.
Micron's low forward P/E might reflect investors' concerns about an eventual decline in revenue, which has soared from artificial intelligence-driven demand for memory. As the AI industry shifts from training to inference, or the process of running AI models, memory chips have become crucial to supporting larger, more complex models that can reason.
Despite tightening supply, Micron and its fellow memory-chip makers have been reluctant to add capacity, fearing that demand will eventually slow down. That's given the companies a lot of pricing power.
Now, Micron, SK Hynix (KR:000660 )and Samsung Electronics (KR:005930 )have announced plans to add capacity to address supply shortages, though production is not expected to start until at least the latter half of 2027. Analysts expect supply to be tight going into 2028.
Here are the 10 SOXX stocks with the highest projected revenue CAGR from calendar 2026 through 2028:
Company Projected sales CAGR from calendar 2026 through 2028 Forward P/E Forward P/E as of Dec. 31 2026 price change Increase in rolling 12-month EPS estimate Credo Technology Group 38.9% 33.5 42.6 10% 40% Broadcom 35.6% 27.0 31.9 15% 36% Advanced Micro Devices 35.2% 33.1 33.1 30% 30% Astera Labs 33.1% 59.0 70.5 3% 23% Marvell Technology 30.3% 31.5 24.0 57% 20% Arm Holdings 27.6% 75.3 51.2 49% 1% Nvidia 26.2% 21.7 24.5 6% 20% Taiwan Semiconductor Manufacturing 22.2% 21.2 24.1 20% 36% Teradyne 18.2% 52.7 36.7 89% 32% Rambus 17.6% 38.7 30.8 31% 4% Source: LSEG
MW The historic surge in chip stocks highlight's Micron's valuation, and a related warning
By Britney Nguyen and Philip van Doorn
The iShares Semiconductor ETF has rocketed 34% amid a long winning streak - its best 13-day stretch in 24 years
Micron's revenue is expected to decline in 2028.
The broad stock market has soared into record territory, more than erasing the weakness seen following the attack on Iran by the U.S. and Israel, and the coincident gains of semiconductor stocks have been breathtaking. But within the valuation data for the red-hot chip sector, there is a warning for investors in a hot pocket of an industry that has been cyclical for decades.
Here are this year's total returns for the iShares Semiconductor ETF SOXX and the State Street SPDR S&P 500 ETF Trust SPY, with dividends reinvested, through Thursday:
Through April 17, the iShares Semiconductor ETF returned 34.9% for 2026, while the SPDR S&P 500 ETF Trust returned 3.2%.
SOXX tracks the PHLX Semiconductor Index SOX, while SPY tracks the S&P 500 SPX by holding all of its stocks weighted by market capitalization. Both groups of stocks wiped away any semblance of their declines into late March, with the S&P 500 and SOXX setting new records this week.
One reason chip stocks have performed so well is that analysts' profit estimates for the group have been increasing so quickly.
The SOXX was on track to be up for 13 consecutive sessions - its longest winning streak since June 11, 2024, when it climbed for 15 straight trading days, according to Dow Jones Market Data. The 34.1% gain during that streak is also its best 13-day stretch since Nov. 4, 2002, the data showed.
History suggests that investors shouldn't worry that a long winning streak could signal a buying climax at the end of a bull market.
Since the SOXX's inception in July 2001, there have been four winning streaks of double-digit days, with the last two occurring in line with the bull market that ran from late 2015 to early 2018.
Buying into the chip sector at the end of those streaks still netted nice gains for investors. After a 10-day streak that ended on June 3, 2016, the SOXX rose 105% until the end of the bull market on March 12, 2018. And after its 11-day streak that ended on Oct. 11, 2017, the SOX rose another 19.4% until the end. (The end of a bull market, in this case, is defined as the start of a decline of more than 20% from peak to bottom.)
What the P/E ratios say about the SOXX's biggest
Here is a look at forward price/earnings valuations for the 10 largest SOXX holdings as of Thursday's close. The PHLX Semiconductor Index follows a modified cap-weighting strategy, with the largest five components limited to 8% of the index and the remaining holdings limited to 4% when it and SOXX are rebalanced quarterly.
A stock's forward P/E ratio is its price divided by the consensus 12-month earnings-per-share estimate among analysts polled by LSEG. The table shows this year's changes in the stocks' prices and the following 12-month earnings estimates.
Company Forward P/E Forward P/E as of Dec. 31 2026 price change Increase in rolling 12-month EPS estimate
Broadcom 27.0 31.9 15% 36%
Nvidia 21.7 24.5 6% 20%
Micron Technology 5.5 7.9 60% 132%
Advanced Micro Devices 33.1 33.1 30% 30%
Marvell Technology 31.5 24.0 57% 20%
Applied Materials 31.1 26.0 52% 27%
Intel 87.3 61.2 86% 30%
Monolithic Power Systems 60.6 43.8 55% 12%
Teradyne 52.7 36.7 89% 32%
KLA 37.0 31.0 43% 20%
Source: LSEG
All of these stocks were up 2026 through Thursday, while the rolling consensus 12-month EPS estimates had increased by at least double digits for all. But the top three on the list stand out because their forward P/E ratios have declined despite the increases in their share prices. The rolling consensus 12-month EPS estimates have increased even more.
Micron (MU) has stood out the most, with its rolling 12-month consensus EPS estimate increasing 132% since the end of last year. Micron's forward P/E has declined to 5.5. This is a very low valuation when compared with a forward P/E of 20.1 for the S&P 500 and 22.5 for SOXX, as calculated by LSEG.
Read: Intel's stock has been 'absolutely on fire.' Now it needs to deliver on the hype.
Revenue growth projections - the Micron warning
Price/earnings ratios reflect profit expectations for the following 12 months. But investors with a longer-term horizon will also be interested in sales-growth projections. Consensus sales estimates are available through 2028 for 28 of the SOXX 30 companies.
The sales estimates are adjusted for calendar years for companies (such as Nvidia) with fiscal reporting periods that don't match the calendar.
Since one might expect sales-growth expectations for 2026 to be reflected in the stock prices already, we've looked at projected compound annual growth rates (CAGR) for the companies' sales from calendar 2026 through 2028.
For all 28 companies, revenue is expected to increase in 2027. But for 2028, Micron is the only one for which revenue is expected to decline.
The consensus calendar 2026 revenue estimate for Micron is $130.65 billion, with analysts expecting the company's sales to increase by 33% in calendar 2027 to $174.02 billion, then decline by 10% in calendar 2028 to $156.71 billion. Those numbers translate to a projected revenue CAGR of 9.5% for the manufacturer of computer memory chips from calendar 2026 through 2028, compared with a weighted projected revenue CAGR of 17.8% for the S&P 500 information technology sector and 7.5% for the full S&P 500.
Micron's low forward P/E might reflect investors' concerns about an eventual decline in revenue, which has soared from artificial intelligence-driven demand for memory. As the AI industry shifts from training to inference, or the process of running AI models, memory chips have become crucial to supporting larger, more complex models that can reason.
Despite tightening supply, Micron and its fellow memory-chip makers have been reluctant to add capacity, fearing that demand will eventually slow down. That's given the companies a lot of pricing power.
Now, Micron, SK Hynix (KR:000660 )and Samsung Electronics (KR:005930 )have announced plans to add capacity to address supply shortages, though production is not expected to start until at least the latter half of 2027. Analysts expect supply to be tight going into 2028.
Here are the 10 SOXX stocks with the highest projected revenue CAGR from calendar 2026 through 2028:
Company Projected sales CAGR from calendar 2026 through 2028 Forward P/E Forward P/E as of Dec. 31 2026 price change Increase in rolling 12-month EPS estimate Credo Technology Group 38.9% 33.5 42.6 10% 40% Broadcom 35.6% 27.0 31.9 15% 36% Advanced Micro Devices 35.2% 33.1 33.1 30% 30% Astera Labs 33.1% 59.0 70.5 3% 23% Marvell Technology 30.3% 31.5 24.0 57% 20% Arm Holdings 27.6% 75.3 51.2 49% 1% Nvidia 26.2% 21.7 24.5 6% 20% Taiwan Semiconductor Manufacturing 22.2% 21.2 24.1 20% 36% Teradyne 18.2% 52.7 36.7 89% 32% Rambus 17.6% 38.7 30.8 31% 4% Source: LSEG
(MORE TO FOLLOW) Dow Jones Newswires
April 17, 2026 13:20 ET (17:20 GMT)
MW The historic surge in chip stocks highlight's -2-
Earlier this week, Credo Technology's stock $(CRDO)$ soared after the company announced its acquisition of optical transceiver technology leader DustPhotonics, which was seen as positioning the company to capture more share in the growing optical market.
Don't miss: Credo's stock surges. Here's why its new acquisition 'makes perfect sense.'
Despite a pullback over the past few sessions, the stock was still up 64.9% this month. That would be its best month since the record 65.5% rally in May 2023.
-Britney Nguyen -Philip van Doorn
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(END) Dow Jones Newswires
April 17, 2026 13:20 ET (17:20 GMT)
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