Flying on Semiconductors

Issue 67;

• The SOX looks like a bubble.
• Momentum is extreme outside of Europe.
• Indonesia slumps as MSCI excludes many stocks.

The World Index maintains a bullish ByteTrend Score of 5 in USD. The price has made a new all-time high. It is 9.6% above the 200-day moving average, which is not extreme, but parts of the market are.

World Index – Developed Markets – Daily

The SOX is 65% above its 200-day MA, which is extreme. This constitutes $14.6 trillion of the S&P’s $65 trillion market cap.

Philadelphia Semiconductor Index – Deviation from trend

Global Equity Breadth – CAPR

The “alpha” breadth, i.e. the % of stocks beating the World Index, continues to shrink. The share of laggards grows.

This week, we highlight the country, sector, and industry charts. They are a little small, but they tell the story clearly.

Trend Strength by Country – CAPR

The black line on the left highlights how few countries are strong, and the red, how many are weak. Norway is strong due to oil; Taiwan and Korea are strong due to IT hardware. Not many others stand out, with Indonesia particularly weak as it has many stocks which have been excluded by MSCI from the indices.

Trend Strength by Sector – CAPR

The Technology sector stands out, with hardware in blue and software in red. Outside of Commodities and Finance, the world sectors are weak.

Trend Strength by Industry - CAPR

By industry, this point comes across most strongly. Only IT hardware is raging, while most industries are slack. The lower red line highlights this.

Trend Type Performance - World

The divergence of the leaders has run wild. Emerging trends are still rising, but bear and weak trends are not.

Trend Type Performance - Americas

This is a strong theme in the Americas.

Trend Type Performance – Asia

And even stronger in Asia.

Trend Type Performance – Europe

But much less so in Europe. Curiously, the weakening group is doing well, implying that Europe may be the anti-bubble trade, as oversold stocks perform.

Regions and Industries Average Relative Score

This table (below) shows the average CAPR score for each global industry, by region and in total.

Technology Hardware barely strengthened this week but maintained its top spot in the table, while mining, energy, and diversified holdings companies all weakened further relative to the index. It gets harder for tech to beat the World Index as it becomes a larger part of it. Advanced Industrial stocks bounced back after a tough run.

In the middle of the table, Retail, Leisure, and Media stocks all made a small comeback. There are some potential green shoots appearing for the Consumer, which has been weak for some time.

At the bottom of the table, there is no relief for Property stocks, although Berkshire Hathaway’s new CEO sees an opportunity, and has made an $8bn acquisition in that sector. The emerging winner from the bottom of the table is Technology Software, which has now beaten the index since bottoming in late February. The software index rose 6% on Friday, making it a 10% week, as the narrative around AI disruption begins to fade. 

User Guide

Refer to our GTI: User Guide for an overview of the key concepts and terminology used in this report. These concepts may take a little bit of getting used to, but they are very powerful once you do.

Leading Trends with New Highs

These stocks are trading at the 30-week CAPR highs with a ByteTrend Score of 5. All charts shown are CAPR rebased to 100.

Dell Technologies

This golden oldie is rolling back the years, with the revenue growth surging to 40% and the share price partying like it’s 1999. It looks like a bubble, but these can be huge money-making opportunities for those on the right side. Meanwhile, betting against them is a dangerous game, as they move so fast. Of course, it helps having President Trump on your side. Having publicly endorsed Dell in February and again in early May, and confirming a Pentagon contract in late May, the stock surged on far better-than-expected earnings.

Rio Tinto

Rio is focused on three core product groups: copper, aluminium, and lithium, as well as its leading iron ore business, with large, low-cost, long-life assets. Aluminium has been the best performing industrial metal over the last 12 months, up over 20% so far this year, and its Canadian assets are hydro-powered, lowering costs. Its copper production grew 11% in 2025, and it has the largest Tier 1 lithium pipeline of any company.

New Leading Trends

These stocks are trading at the 30-week CAPR highs with a ByteTrend Score of 5, except they are new trends this week, having previously had a score below 5. All charts shown are CAPR rebased to 100.

First Solar

When the 1970s oil crisis hit, nuclear power saw a resurgence. Today, mitigation from Hormuz includes building pipelines out of the Gulf states to reduce reliance on the strait, but for many energy importers, it’s another reason to continue the build-out of solar power. Q1 sales grew 24%, on volumes that were 31% higher than a year earlier. Policy uncertainty is holding sales back in the US, but in India, they are booming.

Emerging Trends

These stocks are trading at the 30-week CAPR highs with a ByteTrend Score of less than 5. They don’t have to be in an uptrend, just emerging. All charts shown are CAPR rebased to 100.

Softbank

Softbank has overtaken Toyota to become Japan’s largest listed company, surpassing it for the first time since February 2000, at the very peak of the dotcom bubble. Over the weekend, it pledged €75bn to build an AI facility in Europe, following a 10GW data centre announced in Ohio in March. Having lost billions on WeWork and in 2001, will this time prove different?

Weakening

These stocks are trading at the 30-week CAPR lows with a ByteTrend Score above 0. They are weakening trends but not yet downtrends. All charts shown are CAPR rebased to 100.

AstraZeneca

After appointing Pascal Soriot as CEO in 2012, AZN shifted from a struggling, patent-cliff heavy pharma into a more focused, research-led company with a clearer long-term strategy. It leaned more heavily into oncology (cancer drugs) and research and development. Taking a longer-term strategic approach led to a decade where it surged ahead of domestic rival GSK. But a successful decade leaves less room for improvement, and the stock has shifted from being a successful turnaround to a mature leader in a sector that is under pressure.

Uber

Uber’s CEO Dara Khosrowshahi is a superb operator. Having successfully run Expedia for many years, he arrived at Uber, which had been broken by driver and boardroom scandals and was heavily loss-making. He has steadily turned it into a solidly profitable, regulator-friendly, scandal-free business that has enabled food delivery and taxi journeys in an increasing number of cities worldwide. However, a recent push to acquire European food-delivery business DeliveryHero is making investors nervous, as is the potential future competition from autonomous vehicles.

Bear Trends

These stocks are trading at the 30-week CAPR lows with a ByteTrend Score of 0. They are in a downtrend. All charts shown are CAPR rebased to 100.

Mastercard

Rightly hailed as one of the strongest businesses in the world for decades now, Mastercard and its duopoly partner Visa operate a two-company toll road on nearly all global payments. A percent here, a basis point there, and it adds up to $32bn in annual sales, growing double-digit with incredibly high margins. However, valuations reflected this and reached extreme levels from 2018 onwards. Now that stablecoins are emerging as a real threat to its business, and AI is stealing the limelight, the duopoly has finally come under pressure.

Charles Schwab

Recent results were strong across the board at banking and investment firm Charles Schwab. This was driven by high trading volumes, but lower revenue per trade has caused some concern. AI is threatening its brokerage and advisory services, forcing it to invest in reinventing them, while traditional rivals continue to put pressure on fees and interest offered to clients on their cash balances.

GTI 200 Spreadsheet

We are pleased to share the GTI 200 spreadsheet. Download the spreadsheet below to view the CAPR and local currency scores, and more, for the world’s largest 200 stocks. Have a look at the different groups and the main list “All stocks”. The Insights tab is interesting, and don’t forget to expand the columns by clicking on the “+” at the top of the page if you want to see more trend data.

Outlook

The market is flying semiconductors, and little else. That said, the weakest stocks are stable rather than falling, so the risk of a bear market remains modest. The last time the semis were this hot, back in 2000, it took 17 years to make the next new high.

The SOX Index

Thanks for reading GTI.