Nasdaq 100: Is the SOX Death Cross Signaling More Semiconductor Losses Ahead?

Is the Semiconductor Sector Flashing Warning Signals for 2025?

Semiconductor stocks are presenting mixed signals as the new year begins. The recent “death cross” on the PHLX Semiconductor Index (SOX) suggests bearish sentiment may dominate. Yet, within the sector, standout performers like Broadcom (AVGO) defy the trend, creating diverging narratives for traders to watch closely.

AMD and AMAT: Bearish Trends Taking Hold

Applied Materials, Inc. (AMAT) and Advanced Micro Devices, Inc. (AMD) are showing signs of weakness, with both stocks trading well below key moving averages.

AMAT: Priced at $162.63, AMAT remains under the 50-day SMA of $176.50 and the 200-day SMA of $200.54. This positioning reflects a confirmed death cross pattern and signals further downside potential.

AMD: Currently at $120.79, AMD’s price is trailing its 50-day SMA of $138.37 and 200-day SMA of $153.47. The declining slope of both averages indicates persistent downward pressure with little sign of reversal.

ASML’s Slump: Is Recovery Out of Reach?

ASML Holding N.V. (ASML) trades at $693.08, barely below the 50-day SMA of $695.34 but significantly under the 200-day SMA of $862.34. This sizable gap underscores the lack of momentum, reinforcing bearish sentiment for ASML as it struggles to regain footing.

Broadcom (AVGO) Defies the Sector’s Downtrend

Amid widespread declines, Broadcom Inc. (AVGO) stands apart with a bullish outlook. Trading at $231.84, Broadcom is comfortably above both the 50-day SMA of $186.90 and the 200-day SMA of $160.52. This golden cross pattern highlights strong investor confidence and continued buying pressure, positioning AVGO as one of the rare bright spots in the semiconductor landscape.

SOX Index Slips Below Key Levels

The broader PHLX Semiconductor Index (SOX) mirrors the sector’s bearish tone. At $4,979.93, SOX trades under its 50-day SMA of $5,061.34 and 200-day SMA of $5,066.71. This narrow yet consistent break below the moving averages adds to concerns of prolonged weakness in the semiconductor market.

Will Taiwan Semiconductor (TSM) Provide Stability?

Despite the prevailing bearish mood, Taiwan Semiconductor Manufacturing Company (TSM) shows relative strength. TSM’s price of $197.49 remains above both the 50-day SMA of $195.40 and the 200-day SMA of $170.44. This positioning suggests some stability, offering a potential counterweight to the sector’s broader downward pressure.

Where is the Semiconductor Sector Headed Next?

The outlook for semiconductor stocks entering 2025 leans bearish, driven by widespread death cross formations across key names like AMD, AMAT, and ASML. However, bullish signals from Broadcom and TSM could provide support to the broader market. Until stronger catalysts emerge, downside risks are likely to persist, keeping the sector under pressure for the near term.

More Information in our Economic Calendar.