VanEck Chip ETF Breaches Bear Market as AI Investment Thesis Faces Its Sternest Test
Published on 07/18/2026 at 18:54 | Redaktion boerse-global.de
Even a record-breaking quarter from Taiwan Semiconductor Manufacturing Company couldn't shield the semiconductor sector from a brutal week. The VanEck Semiconductor UCITS ETF closed Friday at €92.15, down 1.01% on the day and 8.83% lower over the past seven days — its worst weekly performance since the April 2025 tariff shock. The broader Philadelphia Semiconductor Index has now fallen more than 20% from its June high, pushing the industry into official bear market territory.
The trigger came from Shanghai, where the Chinese startup Moonshot AI unveiled Kimi K3, a model boasting 2.8 trillion parameters that scored 57 points on the Artificial Analysis Intelligence Index — surpassing Anthropic’s Claude Opus 4.8 — and topped the Arena Frontend Code Leaderboard. The model’s full weights are set for release on 27 July under a modified MIT license, allowing developers to download and run it locally. Markets interpreted the development as evidence that China’s AI capabilities are closing the gap far faster than previously priced in.
Analysts are divided on whether Kimi K3 represents an inflection point or merely confirmation of an existing trajectory. Bernstein called it a “confirmatory data point” for China’s steady progress in the AI race, while Morgan Stanley described it as consistent with Beijing’s incremental gains. Goldman Sachs struck a cautionary note of its own, pointing out that AI-related investment as a share of US GDP has already surpassed the levels seen during the dot-com bubble. The unease was reflected in a Bank of America survey showing that 82% of fund managers now rank semiconductors as the most crowded trade on the market.
The selloff radiated well beyond chip stocks. The Nasdaq Composite sank 1.4% to 25,520.24, the S&P 500 dropped 1.6% for the week, and the Dow Jones Industrial Average lost 406.55 points on Friday alone. Geopolitical jitters added pressure: WTI crude jumped 3.7% to $81.88 a barrel amid escalating tensions in the Middle East, further souring risk appetite. Nvidia briefly lost its title as the world’s most valuable company to Apple, while in Asia the Taiwanese index slumped 6% and Tokyo’s benchmark fell around 4%.
Should investors sell immediately? Or is it worth buying VanEck Semiconductor UCITS ETF?
Within the VanEck ETF’s portfolio, the pain was concentrated among its heaviest weights. Applied Materials, Lam Research, Intel, KLA Corp and Arm Holdings each lost roughly 4% in Friday’s session, while Micron and Nvidia gave up more than 2%. A modest intraday recovery trimmed some losses, and Marvell Technology alongside Qualcomm managed to claw back to near breakeven. Since 22 June, semiconductor stocks worldwide have shed an estimated $3.3 trillion in market value, according to Reuters calculations.
Taiwan Semiconductor Manufacturing’s quarterly results — record revenue above $40 billion, a 77% profit surge, and an upgraded 2026 capital expenditure forecast of $60-64 billion — did nothing to stem the tide. Investors brushed aside the headline numbers, a sign that many are no longer willing to give the AI infrastructure spending thesis the benefit of the doubt. UBS added a longer-term concern, projecting that hyperscaler capex will grow 76% this year to $673 billion, then decelerate sharply to 25% in 2027 and just 6% in 2028.
Despite the recent rout, the VanEck ETF’s year-to-date return remains an eye-catching 72.99%, and its 12-month gain stands at 119.09%. The fund is now trading 17.12% below its 52-week high of €111.18, set on 30 June, and sits beneath its 50-day moving average of €97.27. That said, it still holds comfortably above the 200-day moving average of €68.06. The 14-day relative strength index of 41.9 signals neither oversold nor overbought conditions, but the 30-day annualised volatility of roughly 60% underscores just how frayed investor nerves have become.
The next catalyst could come at the end of July, when Moonshot AI releases Kimi K3’s full model weights. If that leads to a wave of cost-efficient, locally run applications, the debate over whether Big Tech’s massive capital spending is justified will only intensify. For now, the semiconductor trade — once the market’s undisputed favourite — is facing a reckoning over whether the AI boom can sustain its own expectations.
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