Semiconductor Stocks Fall 18.6% in July, Bank of America Sees Only Seasonal Correction

According to Bank of America analyst Vivek Arya, the iShares Semiconductor ETF (SOXX-US) fell 18.6% in July 2026, marking its worst month since November 2008. However, Arya characterized the decline as a seasonal correction rather than a fundamental shift in the AI investment thesis.

Bank of America raised its 2026 global AI data center capital expenditure forecast to $851 billion, a 78% increase from its May estimate. The bank also noted that Remaining Performance Obligations (RPO) for the four major cloud providers exceeded $2 trillion, with Microsoft's single RPO reaching $627 billion, indicating strong long-term order visibility.