Semiconductor Stocks Smash Big Tech and Crypto in H1 2026

Semiconductor stocks have been on a tear in the first half of 2026, outperforming both Big Tech and crypto. According to Deutsche Bank and CoinGecko data, the Philadelphia Semiconductor Index gained 102% between January and June, while the Magnificent Seven fell 2%. Bitcoin (BTC) lost 33% during this period, dropping from around $87,500 to below $59,000.

The same pattern was seen in ETF flows. The VanEck Semiconductor ETF climbed 72%, and the iShares Semiconductor ETF gained 99%, while the Roundhill Magnificent Seven ETF declined slightly.

Goldman Sachs derivatives specialist Brian Garrett explained the divergence as a market reward for 'names that earn' (capex beneficiaries, semiconductors) versus those that spend. Hyperscalers like Microsoft and Amazon are being treated as cost centers without proven payoffs.

Morgan Stanley strategist Michael Wilson argued on Monday that chip momentum is fading as investors rotate toward hyperscalers. The Philadelphia index has dropped almost 14% from its June record, though it remains 123% higher since September.