Some investors are preparing for a correction in the semiconductor market

Golden Ten Data reported on May 13 that the astonishing surge in semiconductor company stock prices has propelled the rise of the US stock market, but these eye-popping gains have also sparked concerns about market overheating, prompting some investors to prepare for a market correction. Even investors who are optimistic about the sector are getting ready for a possible cooling of this craze. The performance of the semiconductor sector has led some to draw comparisons to the dot-com bubble of 1999-2000. "Whenever you see any asset rising in a parabolic fashion, you have to ask yourself: has the market become too overheated?" said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. Tuz stated that on Monday, the firm sold its position in Qualcomm from its income-oriented portfolio, but kept holdings in other portfolios that include stocks such as AMD and NVIDIA. On Tuesday, related stocks pulled back, with the Philadelphia Semiconductor Index closing down 3%. Some investors are becoming increasingly bearish on the sector. Well-known investor and "Big Short" Michael Burry said on Tuesday that he still holds put options on the iShares Semiconductor ETF, which grant the right to sell the asset.