ValueWorks

The Philadelphia Semiconductor Index (SOX) fell 21% in July, its worst month since 2008, as investors question the sustainability of AI-driven semiconductor demand. Volatility surged, with the index experiencing frequent intraday swings and all stocks in the index declining. Concerns over competition and open-source AI models, along with a hedge fund forced to sell tech shares due to margin calls, highlight growing skepticism in the sector.

Bill Ackman, David Tepper, and other billionaire fund managers are increasing their investments in Amazon, viewing it as undervalued despite its muted stock performance compared to AI-focused peers. Amazon's cloud division is highlighted for rapid growth, and investors argue its components are worth more than the current market valuation.