Goldman Sachs: Chip Stocks Surged Over 83% in H1, Stock Selection Requires Caution
Alina Collins
The Philadelphia Semiconductor Index has surged over 83% year-to-date, dwarfing the S&P 500's ~9.2% gain. Goldman Sachs warns that chasing the sector broadly no longer pays — stock-picking within chips is now the game.
Chip stocks are up 83% — is it too late to pile in?
The SOX index has rallied over 83% YTD, versus roughly 9.2% for the S&P 500 and 11.6% for the Nasdaq.
This means → chip stocks have outpaced the broad market by roughly 9×, leaving very few "cheap tickets" in the sector.
Goldman sees room for Q2 earnings to beat expectations, but the high base makes buying the dip far less attractive than it was earlier this year.
Which sub-sectors does Goldman favor?
Goldman names three pockets of relative strength: CPU and ASIC chipmakers, memory-chip plays, and semiconductor equipment suppliers.
At the single-stock level, Goldman highlights AMD and Applied Materials — AMD for its CPU and DRAM exposure, Applied Materials for the equipment angle.
In plain terms = Goldman's logic is simple: rather than betting on the whole chip sector to keep rising in lockstep, concentrate on the lines with concrete earnings support.
What did the market's same-day reaction confirm?
As of report time, AMD was up ~7.8% on the day; the SOX index gained ~3.15%, erasing the prior week's losses.
Yet Applied Materials — also on Goldman's list — fell ~1.4%, bucking the rally.
This reflects a market already "picking winners" within chips — even among Goldman's favored names, performance diverged sharply, validating the bank's core message of selectivity.
Where do Goldman and JPMorgan disagree?
JPMorgan had previously called for a broad "buy the dip" approach to the chip sector, striking a more optimistic tone.
Goldman is more cautious: intra-sector divergence will define H2, and whether Q2 earnings deliver on expectations is the key checkpoint.
This means → two top-tier banks are offering opposite playbooks for the same sector — one says "buy every dip," the other says "don't go all-in, cherry-pick." For ordinary investors, stock selection matters more than sector allocation in H2.
Content is for reference only, not financial advice.