Today I sold half of my semi etf holdings which i held for 4 years

AI Summary

Summary

Author sold half of SMH position after 4 years, citing overvaluation in most semi stocks (40+ FW PE, 15% revenue growth as insane).
Specific bearish calls on Intel (INTC) – 80 FW PE with 7% growth – and Micron (MU) – brutal competition, long-term demand drop, margin compression.
Still bullish on TSM and NVDA, but sector as a whole driven by "dreams and hopes." Thesis: sector overvalued, selective opportunity.
Quality assessment: Reasonably well-researched DD – includes specific metrics (PE, growth rates, price moves) and explicit reasoning. Mix of personal experience and fundamental critique.

Score 17

Comments 19

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u/ChillMeerkat Reddit r/ValueInvesting

Intel has 80 forward P/E with only 7% revenue growth, failed at manufacturing/innovation. Extreme valuation disconnect suggests price correction as fundamentals don't support the hype. Short Intel as a classic overvalued value trap with no competitive moat. Takeover rumors, government subsidies, or unexpected turnaround could spike the stock.

u/ChillMeerkat Reddit r/ValueInvesting

MU went from $100 to $800 in a year; memory business has brutal competition. New factory buildout will increase supply while long-term demand drops, crushing margins and EPS. Mean reversion play – short MU as cyclical memory boom turns to bust. AI memory demand persistent, supply constraints, or consolidation could extend the run.

u/ChillMeerkat Reddit r/ValueInvesting

Author sold half of SMH; >50% holdings overpriced by his criteria (40+ PE, 15% growth). Sector-wide overvaluation creates asymmetric risk; even if NVDA/TSM are good, the ETF weights them with weaker names. Avoid SMH as a broad semi bet – better to pick individual names or reduce exposure. Strong AI demand continuing could sustain high multiples longer than expected.

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