Chip sector volatility surges to highest level since 2020
Volatility in semiconductor stocks has reached levels not seen since the early days of the pandemic, a sign of how volatile the market's favorite trade in artificial intelligence has become. The iShares Semiconductor ETF (SOXX) rose more than 3% today, after falling 4.8% on Monday. SOXX's 50-day rolling daily return standard deviation has climbed to 4.2%, its highest level since May 2020. This indicator can be considered a volatility measurement tool: it reflects the magnitude of the sector's average daily moves over the past 50 trading days, but does not indicate direction. The surge comes as investors weigh strong demand for artificial intelligence, lofty valuations and supply chain pressures. The most volatile stocks are concentrated among AI-related and high-beta stocks: Marvell, ARM Holdings, Astera Labs, Micron, and Credo Technology have the highest 50-day standard deviations in the sector. In contrast, leading mega-cap stocks appear calmer: And Broadcom are at the lower end of the list, suggesting that recent volatility has been concentrated in smaller, more cyclical chip trades.