The Bubble’s Final Phase Has Now Begun
Bravos Research examines whether the semiconductor sector’s sharp correction marks the end of its bull market or a temporary shakeout within an ongoing mania phase. The analysis concludes that momentum remains positive for now, meaning semiconductor stocks could continue rising for months or even years, but a sustained downturn in moving averages would signal the risk of a prolonged bear market.
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Read the Full SummaryKey Points
Retail investors poured $12 billion into semiconductor ETFs in June, roughly 10 times their purchases from a year earlier, as the semiconductor index subsequently fell 25%.
The semiconductor sector has significantly outperformed the broader market, rising more than 200% over two years versus a 35% gain for the S&P 500; Bravos Research identifies this divergence as evidence of euphoric conditions.
Bravos Research argues that ownership has shifted toward more emotional and leveraged retail investors, which could intensify downside pressure when prices fall.
The analysis uses South Korea as an example of how retail leverage can amplify a reversal: after the KOSPI rallied 240% from its April 2025 low, margin calls and forced selling helped drive a 40% one-month plunge.
Semiconductor Mania Phase
The semiconductor sector has suffered a sharp correction after heavy retail buying, but the analysis argues this may still be a shakeout within a longer-lasting mania phase.
Retail Ownership Risk
The shift from institutional to leveraged retail ownership makes semiconductor stocks more vulnerable to panic selling, as illustrated by the dramatic reversal in South Korean equities.
Momentum Signals Matter
The late-1990s technology bubble shows that severe corrections can precede further gains, with a sustained downturn in moving averages—not retail enthusiasm alone—signaling a true bear market.
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