Kobeissi Letter Predicts S&P 500 Will Break 8000 Points
The Kobeissi Letter states that chip stocks have quietly taken over leadership in this bull market.
Among the 10 best-performing stocks in the S&P 500 this year, 8 are from the semiconductor industry. Despite the seven major U.S. tech stocks falling over 20% from their highs, the semiconductor sector remains strong.
The S&P 500 is currently only about 1% below its historical high, marking the first time since 2022 that a sector outside the seven major stocks has led the rally while the major stocks have moved in the opposite direction.
This rotation is seen as a positive signal, indicating that large-cap tech stocks are preparing to take over again. With semiconductors continuing to outperform or cool down, the S&P 500 is expected to rise above 8000 points, benefiting asset holders.
Source: Public Information
ABAB AI Insight
Kobeissi Letter has long focused on macro and market structure analysis, previously capturing sector rotation signals accurately, including the continued leadership of semiconductors in the S&P 500 driven by AI in 2025.
In terms of capital flow, funds are shifting from the previously over-concentrated large-cap tech giants to semiconductor equipment and chip manufacturing companies, achieving rapid rebalancing through exchange-traded funds and institutional allocations, strategically betting on long-term demand for AI infrastructure rather than a single company narrative.
Similar to Nvidia leading the cycle from 2023 to 2025, the current transition to semiconductors resembles the early 2010s cycle stocks filling the leadership vacuum during a tech adjustment period, with the market currently in a transition phase from concentration to broad-based expansion.
Essentially, this represents a dynamic shift of capital concentration towards technological substitution: semiconductors are reshaping pricing power through process iteration and AI computing power demand, breaking the monopoly of the seven major stocks. The mechanism is that hardware infrastructure investment cycles are longer than software narratives, driving funds to continue flowing upstream in the supply chain.
ABAB News · Cognitive Law
Bull market leadership is never eternal; rotation is the source of lasting profits.
Concentration equals risk; diversification in underlying technologies leads to long-term success.
Those who sell narratives gain attention, while those who hold hardware control capital paths.