Semiconductor ETF Plunges 18.6% in July, Bank of America Calls It Temporary Correction Amid AI Boom

According to Bank of America semiconductor analyst Vivek Arya, the iShares Semiconductor ETF (SOXX-US) fell 18.6% in July, marking its worst monthly performance since November 2008 (17-year low). Arya characterized the decline as a "summer correction" within the broader AI bull market rather than a fundamental industry reversal, noting that mega-cap cloud providers continue expanding AI infrastructure investments.

Bank of America raised its 2026 global AI data center capital expenditure forecast to $851 billion, up 78% year-over-year, with 2027 projected at $1.15 trillion (up 35%), exceeding prior estimates of 68% and 25% growth. Weekly AI token usage has averaged 9% growth since June, while the four major cloud platforms' combined remaining performance obligations exceed $2 trillion, indicating sustained demand and multi-year revenue visibility.