In the first half of 2026, investors bet not on Big Tech or crypto, but on chip manufacturers. According to Deutsche Bank and CoinGecko, the Philadelphia Semiconductor Index rose by 102%. For comparison, the Magnificent Seven dropped by 2%, and bitcoin lost 33%.
Now, Wall Street is debating what will happen next. Goldman Sachs believes that interest in semiconductors will remain. At Morgan Stanley, on the other hand, they see signs that the trade is already starting to reverse.
How Chips Became the Top Asset of the Half-Year
In the Deutsche Bank ranking for the first six months of 2026, the leader among major global assets was the Philadelphia Semiconductor Index. From January to June, it gained 102%. These figures were also cited by Schaeffer’s Investment Research.
See Also: Oil Stabilizes Near Prewar Levels. OPEC+ Increases Production in a Falling Market
South Korea’s KOSPI also showed a strong result, where chip manufacturers play a major role. The index rose by 89%. Japan’s Nikkei climbed by 35%.
Against this backdrop, U.S. indices looked more modest. Nasdaq added only 13%, and the S&P 500 grew by less than 10%.
The contrast with the Magnificent Seven is especially noticeable. This group of the largest tech companies had lifted the market for two years, but finished the first half with a 2% decline.
Asset returns in the first half of 2026: semiconductors outperformed Big Tech and cryptocurrencies
The crypto market lagged even further. Bitcoin fell by 33% over six months, dropping from about $87,500 to below $59,000. Ethereum lost 47%, Solana dropped by 41%.
Classic safe-haven assets didn’t help investors either. Gold fell by 7%, silver lost 18%.
ETFs also showed where capital was flowing. The VanEck Semiconductor ETF rose by 72%, and the iShares Semiconductor ETF gained 99%. The fund tracking the Magnificent Seven ended the period with a slight decline.
The sector received an additional boost due to shortages of memory and storage. Chip manufacturers were able to raise prices, and the entire industry approached annual revenue of $1 trillion.
Comparison of the SOX semiconductor index and the Magnificent Seven MAGS ETF. Source: TradingView.
Goldman Sachs Explains the Reversal Simply: The Market Pays Those Who Are Already Earning
Goldman Sachs derivatives specialist Brian Garrett explained in a client note, cited by Stocktwits, why investors are holding fewer positions in Mag7.
See Also: Revolut Will Close Access to USDT for EU Clients
According to him, the market now rewards companies that are already making money from the AI boom. These are chip, memory, and equipment manufacturers. But for those who are only spending hundreds of billions on infrastructure, there are more questions.
Such companies include Microsoft, Amazon, Meta, and Google. They are actively building data centers, but investors are increasingly asking when these expenses will start to pay off.
For chip manufacturers, the situation is simpler. They are selling equipment and components right now, so they are already generating revenue at the current stage of AI infrastructure construction.
This logic did not help cryptocurrencies. Bitcoin does not directly profit from AI infrastructure, so the market treated it more as an asset without a clear cash flow. Pressure increased after Michael Burry’s warning about a possible bubble, which caused memory manufacturers’ stocks to drop.
But there were exceptions within the crypto market. Render rose by 17%, and NEAR Protocol gained 18%, while most major coins lost more than 30%. Both projects are related to computing power, which has become one of the most scarce resources in this cycle.
However, this theme did not save the entire sector. Bittensor and Fetch.ai also ended the first half with declines.
Cryptocurrency returns in the first half of 2026: AI tokens versus major coins.
Bitcoin miners found themselves between two trends. Riot Platforms continues to sell BTC and fund a pivot toward AI, while other mining companies are seeking similar deals with data centers.
Morgan Stanley Expects a Cooldown in the Chip Sector
At Morgan Stanley, they believe that the momentum for semiconductor manufacturers is already weakening. Strategist Michael Wilson stated that investors are gradually returning to the largest tech companies. This was reported by Bloomberg.
See Also: Gold Retreats From Two-Week High. Dollar and Fed Pressure the Metal
Philadelphia Semiconductor Index has already fallen by almost 14% from its June peak. Although, if you look from last September, it is still up by about 123%.
Signs of fatigue appeared even before July. A strong forecast from Micron could not extend the rally, and in the South Korean KOSPI market, automatic trading halts were triggered several times in June due to sharp moves.
Wilson believes that hyperscalers may gain an advantage in the near future. He expects them to become more cautious about infrastructure spending.
JPMorgan strategist Mislav Matejka also believes that in the second half of the year, the market could broaden, rather than relying solely on the AI theme.
“AI is unlikely to remain the only theme driving the market.”
For crypto, this debate is more important than it seems. If some capital starts to exit the overheated chip trade and seek out lagging assets, bitcoin could come into investors’ focus. Currently, BTC is trading around $61,626 after a brief surge to nearly $64,000 amid short covering.
But so far, major banks are not naming digital assets as the next direction for rotation. The coming weeks will show whether hyperscaler reports confirm a shift in sentiment and whether some capital can return to the crypto market.
