AI stocks are flashing a real bubble-burst warning that’s hard to ignore

Artificial intelligence ( AI ) stocks are flashing warning signs as semiconductor shares suffer their steepest relative decline in years. In this line, the Semiconductor Index (SOX) has fallen for eight consecutive trading sessions, while global technology equity funds recorded $4.8 billion in outflows, even as the broader market attracted capital, according to data shared by The Kobeissi Letter on October 19. The SOX-to-S&P 500 ratio has dropped to 1.45, its lowest level since April 2026. Since its mid-June peak, the ratio has declined 0.46 points, or 24%. Over the same period, the Philadelphia Semiconductor Index has fallen 24%, while the S&P 500 has gained 2%.

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