JP Morgan Sees Semiconductor Deleveraging
menhguin · x · 2026-07-18
A shared JP Morgan analysis suggests that the recent weakness in memory chip/semiconductor stocks is more of a deleveraging phase following excessive leverage, rather than a sudden collapse in industry fundamentals.
Key points include:
- Since June, positions in semiconductor-related holdings and leveraged ETFs have seen a significant pullback;
- The AUM decline for these leveraged ETFs has been steeper than that of broader market leveraged products;
- Leverage in options and margin accounts remains elevated, and the market may need about 3 months of high-volatility consolidation to normalize;
- Once deleveraging concludes, long-term supply and demand dynamics could support stock prices again.
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