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Short Summary
Main recommendation: Own semiconductor stocks now, using the pullback to the 200-day moving average as the entry point, because Rich Ross of Evercore ISI argues that the semiconductor sector has been in a sharp, temporary unwind and is set to resume its leadership. He frames this as a "buy semiconductors" call he has held for 30 years, supported by technical charts and AI-driven demand.
Key Points
- Semiconductors fell sharply against software starting in July after a historic first-half rally, and Ross views the drawdown as a buying opportunity rather than a trend break.
- Charles suggested the drawdown was in anticipation of a more hawkish Fed, and Ross agreed, adding that recession fears tied to the war played a role, and that "the move's already happened."
- Ross says semis relative to software is "the most important chart in the entire market," with the 200-day moving average as the key support level.
- Lam Research (LRCX) is treated as a constructive base-builder: it fell from 425 to 265 but did not fold over August, and Ross expects a breakout above its 50-day moving average.
- Ross sees AI power demand as the driver for Bloom Energy, which he expects to return to new highs, and Caterpillar, which he says is building the data centers Bloom powers.
- Lumentum and Micron are discussed as relative-strength names: Lumentum held up better in the weak tape, while Micron has rallied about 50% off its lows but has lagged in re-engaging.
Details Worth Noting
- Concrete instructions: Treat the 200-day moving average as the entry zone for semiconductor exposure, and wait for a break above the 50-day moving average as confirmation before adding, per the chart logic presented. Ross suggests Lam Research's failure to reclaim the 50-day is an "orange flag," meaning slow down rather than stop, so a breakout above that line is the signal to watch. Use relative strength in a weak market as a sign of leadership when the tape turns strong.
- Ross explicitly says the 2026 optic-trade timing for Lumentum is "right now," despite the stock being sideways since its May peak, and he expects leadership to continue into the fourth quarter for Caterpillar.
- Ross frames the Fed-hike concern as priced in before rate increases, noting the market "sees into the future" ahead of Fed decisions.
- Ross's views are presented as technical and fundamental analysis from a guest on a market program; they are not personalized investment advice, and the transcript includes no risk disclosures or position-sizing guidance.
Bottom Line
The case rests on chart support at the 200-day and AI-driven demand, but it is a short-term technical thesis that depends on the 50-day breakout Ross expects, and the transcript offers no evidence beyond his own chart reads.
