Semiconductor Stocks Trade at 25% Discount to S&P 500, Widest Since 2018
Key Facts
Data compiled by Citadel Securities from Bloomberg and S&P Global show that semiconductor stocks listed in the S&P 500 were trading at a 25% discount to the broader index as of November 3, 2026, the widest since December 2018. That puts the sector’s valuation at its lowest relative level in about 8 years, according to the historical comparison cited by Citadel. The valuation decline comes as the sector’s forward earnings estimates have risen 30% since June 30. The firm expected the sector to account for about half of S&P 500 earnings growth in the third quarter, despite representing less than a fifth of the index. Citadel said, "Compared with the S&P 500, semiconductor stocks trade at a 25% discount, the widest since December 2018."
The semiconductor sector’s forward earnings multiple in the S&P 500 stood at about 13.8 times as of November 3, according to Citadel data based on Bloomberg and S&P Global. That is down 45% from its January 2026 peak and marks the multiple’s lowest level since July 2022. The decline means investors are paying less for the sector’s expected earnings than they were at the start of the year. But estimates for those earnings have continued to rise since the end of June, moving in the opposite direction from valuations. Citadel said forward earnings estimates had increased 30% since June 30 and that the sector was on track to generate nearly half of the index’s earnings growth in the third quarter.
The valuation comparison coincided with a sharp Wall Street selloff on November 5. The S&P 500 fell 4.4% to 7,353.73 points, while the Nasdaq dropped 5.5%, according to the Associated Press. The agency attributed the selloff to stocks of companies involved in building AI data centers and to concerns that expansion could slow after the midterm election results. Index moves showed pressure spreading beyond the chip sector in that session. The market’s decline came after semiconductor stocks had already recorded a wide discount to the broader index in the latest available valuation data.
On November 6, the S&P 500 was up 0.9% at 11:45 a.m. Eastern time, according to the Associated Press, while Nvidia shares rose 3.7%. The stock’s gains followed declines of 9.3% in the November 5 session and 3.2% in the November 4 session. The agency said the week’s pressure was linked to concerns about delays in building AI data centers and higher borrowing costs. The gains pared part of the index’s weekly losses, which stood at 2.1% by midday Friday. The stock and index remained volatile after the selloff weighed on companies tied to AI infrastructure.
Investors’ next focus is Nvidia’s quarterly results, as the market tracks data-center spending and the timing of its expansion. The company scheduled a conference call to discuss results for the third quarter of its fiscal 2027 on November 17, 2026. Nvidia announced the date in an investor-relations document for its previous earnings call. The announcement date follows a week in which the stock fell sharply before rebounding in the November 6 session. The anticipated results will provide a near-term update on the company’s performance amid concerns that have linked market moves to AI data-center financing and borrowing costs.