Red Flag Alert: Chips Haven’t Rallied Despite the Best Earnings in a Decade

by Roger Scott | May 4, 2026

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Sometimes the market tells you everything you need to know — not through what it does, but through what it doesn’t do.

Right now, we’re seeing something that should concern every trader paying attention to market structure. Semiconductor stocks have delivered the best earnings in almost a decade, yet chip prices haven’t moved higher the past several days.

We’re talking about Advanced Micro Devices (AMD), Intel (INTC), Marvell Technology (MRVL), Qualcomm (QCOM) and several others reporting exceptional numbers — and the semiconductor index has been completely flat.

This isn’t normal. Markets don’t move this way. Supporting this sector divergence, only 300 stocks are making new highs compared to stronger periods when 600-800 typically break out. That confirms a weakness in market breadth beneath the surface.

Meanwhile, some names outside chips have surged in a way that’s anything but sustainable. Apple (AAPL) jumped 2% premarket after earnings while companies like Atlassian (TEAM) and Twilio (TWLO) exploded 20-25% on their reports.

When certain stocks are flying like this while the sector that has delivered the strongest earnings can’t gain an inch, you’re looking at fragmented momentum — the kind that rarely ends well.

Red flag alert: If the best earnings in over a decade can’t move prices, what will?

That’s the $2 million question.

Why This Matters More Than You Think

The entire market rally has been driven by the Nasdaq 100 (QQQ) and semiconductors. Technology (XLK) dominates the info-tech landscape, creating massive concentration risk. Take semiconductors out of the equation and things won’t be pretty.

Sectors outside tech and chips — Utilities (XLU), Consumer Staples (XLP), Communications (XLC) — continue to underperform, underscoring how few stocks are supporting current market strength.

Even sentiment gauges show early signs of strain. The options market put/call ratio reflects growing bullishness, suggesting risk appetite may soon become excessive.

At the same time, we’re seeing market moves that simply aren’t natural. Just as we’ve seen with recent unsustainable surges in gold, unresponsive chip prices after outsized earnings are another example of non-natural behavior that often unwinds abruptly.

If chip stocks continue to lag despite strong earnings, we could see a major correction coming in the S&P 500…

What Traders Need to Do Right Now

The market is becoming more vulnerable, not less. The fact that chip stocks with phenomenal earnings can’t rally tells you buyers aren’t showing up — even with perfect catalysts in place.

Price action is sending a message. And when price and fundamentals diverge this sharply, price is almost always right.

Focus on what the market is actually doing. Price action is the ultimate truth, and right now it’s flashing a warning signal that can’t be ignored. Let price — not narratives — guide your decisions, especially during times like this.

I hope that helps!

Roger Scott
Roger Scott Trading

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