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The VanEck Semiconductor ETF (NASDAQ: SMH) had declined for six straight sessions through October 13, 2026, putting it on course for its longest losing streak since May 2025. Seeking Alpha reported a drop of more than 8% across that six-day slide. A separate TradingView-syndicated report measured the decline at 5.3% over five sessions while still showing a 62.1% gain for the year to date. Those are different measurement windows, not conflicting returns.
The selloff reflects a clash between worries that AI-chip valuations and spending have run too far and evidence that demand, exports and capital spending may remain strong. Investors need to distinguish a short losing streak from proof that the semiconductor uptrend has ended.
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What is driving the semiconductor ETF selloff?
Reports cited three overlapping pressures. First, investors are questioning whether the artificial-intelligence trade has become overheated after a powerful run in chip shares. High expectations leave stocks vulnerable when results, guidance or spending plans merely meet forecasts rather than exceed them.
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Third, growing Chinese competition is raising concern across several chip categories. The reported weakness was broad among memory and semiconductor-equipment makers, although individual SMH holdings did not all move by the same amount on the cited day.
How large has SMH’s decline been?
| Measurement | Reported result | Source and qualification |
|---|---|---|
| Six consecutive sessions through Oct. 13, 2026 | More than 8% lower | Seeking Alpha; six-day slide |
| Five sessions | 5.3% lower | TradingView-syndicated report; five-day window |
| Year to date | 62.1% higher | TradingView-syndicated report; performance through the report date |
The six-day sequence is notable because it was described as the ETF’s longest losing streak since May 2025. It does not, by itself, establish that the sector has entered a bear market. A streak records consecutive down sessions; a trend change requires deterioration in earnings, capital spending, prices or other underlying fundamentals.
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What does SMH own?
SMH gives investors a concentrated basket spanning several parts of the semiconductor supply chain. The syndicated report listed these companies among its 10 largest holdings:
- Nvidia and Advanced Micro Devices, which develop AI and other high-performance processors;
- Taiwan Semiconductor Manufacturing Co., a major contract chip foundry;
- Broadcom, with networking and semiconductor exposure tied to data-center demand;
- Micron Technology, a memory producer;
- Intel, a processor maker and manufacturer;
- Applied Materials and KLA Corp., which supply chip-manufacturing equipment and process-control tools;
- Texas Instruments, an analog-chip producer; and
- ASML Holding, a supplier of advanced wafer-fabrication equipment.
Because these businesses occupy different roles, SMH can fall even when one segment is holding up. Memory pricing, equipment orders, foundry utilization, AI-accelerator demand and analog-chip cycles do not turn at exactly the same time.
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The bearish case: overheating, funding and competition
AI-capex expectations may be too high
The bear case is not that AI demand is nonexistent; it is that stock prices may already discount years of exceptional growth. If cloud and data-center operators slow or defer capital expenditure, chip suppliers could face a reset in revenue expectations and valuation multiples.
Financing costs can pressure the whole chain
More expensive borrowing affects data-center construction, chip-factory expansion and equipment purchases. It can also make investors less willing to pay premium prices for companies whose largest profits are expected well into the future.
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China adds a competitive and policy risk
Increasing Chinese capabilities and competition could pressure pricing or market share in portions of the industry. The impact will vary by product: a memory maker, an equipment supplier and an AI-accelerator designer do not face identical exposure.
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Bulls argue that the decline is a consolidation after a major advance rather than a break in the AI-hardware cycle. South Korean export data was cited as a leading signal for semiconductor demand. The TradingView-syndicated report also quoted Steno Research describing a value gap of more than 150%; that figure is an analyst or research-house view, not an independently verified market statistic.
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“For the bulls, that was just a breather before an uptrend resumed,” Neil Sethi, managing partner of Sethi Associates, said in the cited report.
Andreas Steno Larsen, CIO of Steno Global Macro Invest and founder of Steno Research, offered an even stronger view: “It has basically never been more idiotic to be bearish on the AI hardware trade than right now.” That is an individual market opinion, not a guarantee that SMH will rise.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to judge whether the slide is a buying opportunity
A six-session decline is not enough information for a buy or sell decision. Investors can monitor the following evidence:
- AI-capital-spending commitments: Check whether major customers are maintaining or raising data-center investment plans, and whether suppliers convert those plans into orders and revenue.
- Profit and valuation support: Compare earnings growth and guidance with the prices investors are paying. A falling share price can still be expensive if profit estimates fall faster.
- Financing conditions: Watch interest rates, credit spreads and project financing because they influence the economics of new fabs and data centers.
- China-related exposure: Separate companies with direct sales or competitive exposure from those whose products have different geographic demand.
- Supply-chain indicators: Follow memory pricing, foundry utilization, equipment bookings and South Korean export momentum rather than relying on the ETF’s daily chart alone.
- Portfolio concentration: Review SMH’s current holdings and weights before buying. A sector ETF still carries company-specific and theme-specific concentration risk.
What the losing streak does—and does not—tell investors
The streak signals a sharp change in near-term trading sentiment after a substantial year-to-date gain. It does not prove that AI demand has peaked, that valuations are attractive, or that a reversal is imminent. The most useful interpretation is conditional: sustained capex and export strength would support the bullish view, while falling orders, weaker guidance and intensifying competition would strengthen the bearish one.
SMH is a traded security, so prices can change rapidly and the ETF can lose money. Anyone considering a purchase should check the latest holdings, expense information and personal risk capacity rather than treating the reported six-day move as a forecast.
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