Is Now a Good Time to Buy Semiconductor Stocks Again?

Is Now a Good Time to Buy Semiconductor Stocks Again? Maybe.

According to a recent JPMorgan report, deleveraging in Korea's leveraged ETF market appears to be largely complete. Most of the forced selling driven by leveraged positions has already run its course, leaving little mechanically driven selling pressure in the market.

At the same time, tighter regulations have made it much more difficult for new leveraged capital to enter the market.

Why does the Korean market matter? Because two of the world's three major memory-chip makers—Samsung Electronics and SK hynix—trade in Korea. They play a central role in the global AI memory supply chain, so sharp moves in their stocks can quickly spill over into the broader semiconductor sector as global investors rebalance their exposure.

Wall Street firms such as Goldman Sachs, Morgan Stanley, and JPMorgan don't always get their forecasts right. Still, this time the reasoning seems fairly convincing.

Just as the tide eventually returns after it recedes, capital often flows back into areas that have experienced the deepest selloffs.