Big Tech is dodging the chip stocks wipeout: AlphaCheck

Memory stocks are in a bear market. But the Magnificent Seven are back on offense — leading the market higher once again.

Since the late-June turn in growth stocks, the Roundhill Magnificent Seven ETF (MAGS) is up 8%, while the S&P 500 minus the Mag Seven — tracked by the Defiance Large Cap ex-Mag 7 ETF (XMAG) — is basically flat. Meanwhile, the PHLX Semiconductor Index (^SOX) is down 12%.

The chart below, built using Yahoo Finance's AlphaSpace, shows that same split over the past five trading days, with megacaps gaining ground while semiconductors break down.

That is a sharp reversal from late June, when the market's biggest AI stocks had just absorbed a $2.7 trillion wipeout and investors were questioning whether megacap leadership had finally cracked.

Instead, Big Tech is back in charge — and the rebound is not limited to seven stocks.

Cybersecurity stocks are back near records as software surges, while strength is also showing up in biotech, tech disruptors, China tech, crypto, and aerospace & defense. The market is treating the chip stock wipeout as damage to a crowded hardware trade, not a reason to dump every corner of the growth trade.

Apple (AAPL) is the standout. The stock is leading the Magnificent Seven higher — up 13% since the late-June turn — after a textbook retest of its old ceiling near $275, a former resistance level that has now turned into potential support. Apple is back within 1% of its all-time closing high.

Even Nvidia (NVDA) is outperforming the chip group. Of the 60 semiconductor stocks in the Yahoo Finance basket, it was one of only two names in the green, bouncing off its 200-day moving average — even as the SOX dropped more than 4%.

The broader tape also looks better than the chip wreck suggests.

The NYSE and S&P 500 advance-decline lines — running totals of how many stocks are rising versus falling — are printing new highs. That helps resolve a participation problem that had been hanging over the spring breakout, when the S&P 500 was making new highs before the average stock confirmed.

The chip sell-off is real. But as long as megacaps keep leading, software keeps confirming, and breadth keeps making new highs, the wipeout still looks more like rotation than a full-market growth unwind.

Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared or email him at jaredblikre@yahooinc.com.

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