How Much of Your Portfolio Moves With Chip Stocks?

Chip stocks are about 15.4% of the market value we track, but a portfolio that holds the AI winners can move with them far more than that weight suggests, because chips are nearly three times as volatile as other stocks and drag technology, industrial and consumer names along. The fastest check is to add up the chip weight, then measure how correlated your other holdings are with chips.

• Our data: an equal-weight chip basket moved 39% a year against 14% for all other stocks, with a correlation of 0.55 between the two.
• Four sample portfolios: eight chip stocks gave 1.7 independent bets and fell 17.6% in October, while twelve stocks spread across sectors gave 4.5 bets and rose 3.1%.

This is analysis, not a recommendation. Figures for November 5 are as reported and differ by source and time of day.

How much of the stock market is chip stocks?

The 19 semiconductor stocks on this site were worth about $10.6 trillion on October 30, 2026, or 15.4% of the $69.1 trillion we track across 490 stocks. Three of the 11 largest companies we track are chips: Nvidia, Broadcom and Micron.

Nvidia alone is nearly half of chip value, so a market-weighted chip fund is mostly an Nvidia fund. If you own an index fund, a chip slice of about 15% is already in it. The question is how much you have added on top.

Why does a 15% slice move so much?

Because chips swing harder than the rest of the market. Over the three years to October 30, an equal-weight basket of the chip stocks we track moved about 39% a year on an annualized basis. All the other stocks together moved about 14%.

Volatility explains why a sector with 15% of the weight can account for most of a bad day. On a day when chips fall 12% and everything else falls 1%, chips contribute roughly 1.8 points of the loss and everything else 0.85, from the 15.4% and 84.6% weights.

That is the arithmetic behind headlines like the $1 trillion wipeout: a small group falls a lot, and the total looks enormous.

Which other stocks move with chips?

More than you might expect. We measured how closely an equal-weight basket of each sector group moved with the chip basket on daily returns, over the same three years. A correlation of 1.00 means they move in lockstep, and 0.00 means no relation.

Industrials, at 0.71, move most with chips. That is notable: many industrial stocks are tied to the same AI spending cycle, through electrical equipment, cooling and construction. Staples sit at about zero, and utilities and real estate are low. The exposure is not only in the stocks that say "semiconductor" in their description.

What does a chip sell-off do to a whole portfolio?

A rough rule helps. Regressing everything else on chips gives a beta of about 0.20, from the 0.55 correlation times the ratio of volatility, 14% to 39%. In plain terms, when chips fall 10%, the rest of the market has tended to fall about 2%. The table applies that to a chip fall of 12%, similar to the Philadelphia Semiconductor Index move reported on November 5.

This is a rough estimate from daily data, and real sell-offs vary. It also ignores that the rest-of-market relation can strengthen in a panic. But it shows the direction: a portfolio that is a quarter chips would have lost about twice as much as one with none in a 12% chip fall, even with the other 75% in other stocks.

How do four sample portfolios compare?

To see the effect, we ran four equal-weight portfolios through this site's Diversification Score method over three years. The score runs from 0 to 100 and compares your risk reduction with Ray Dalio's idea of 15 uncorrelated bets. The last two columns show what actually happened.

Twelve stocks do not mean twelve bets. The tech-plus-chips portfolio had 12 holdings and 2.2 independent bets, barely more than the eight-stock mega-cap list. The sector-spread portfolio had a gentler month, but its year to date return was +13.8% against +64.9% for chips only. Diversification costs upside in a boom, which is the other half of the trade.

How do you measure your own chip exposure?

You can do it in five steps with tools on this site and your broker's holdings page.

• List your holdings and weights. Include every fund, not just individual stocks.
• Add up the direct chip weight. Count stocks like Nvidia, Broadcom, Micron, AMD, Qualcomm and the equipment makers.
• Look inside your funds. Open each fund's top-ten holdings. A technology or growth fund may hold 20% to 40% in chips and AI names, which adds to your direct weight.
• Add the linked stocks. Industrial, electrical and data-center names move with chips at a correlation near 0.6 to 0.7.
• Run the correlation. The Diversification Score takes up to 12 stocks, one per sector, and shows the average correlation and the number of independent bets.

The Portfolio Doctor adds another view by reviewing your holdings against the checks used elsewhere on this site. Neither tool tells you what to hold. They show what you already hold.

Why can a fund hide chip exposure?

A fund's name tells you its style, not its contents. An S&P 500 fund is capitalization-weighted, so the biggest stocks have the biggest weights. In the group we track, the ten largest companies hold 39.3% of the value, and three of the eleven largest are chips.

Equal-weight funds hold each stock at the same size, so they own less Nvidia and more of everything else. Dividend and value funds usually own fewer chips, but not always. The only reliable way to know is to read the holdings list. This is also why the Nasdaq correction can feel bigger than it looks in a broad fund.

What can you do about it?

Nothing is required, and nobody can say which way chips go next. Here are common approaches, described as facts about how they work.

• Set a limit. Some investors cap any one theme at a fixed share of the portfolio, and rebalance when it drifts above, which sells some of the winners.
• Add low-correlation sectors. Staples (-0.02), utilities (0.13) and real estate (0.23) have moved least with chips. They have also lagged in booms.
• Hold the stock you understand. A single company with a durable business, such as the ones reviewed in Why did Qualcomm stock fall 9%?, can behave very differently from the group on a given day.
• Accept the volatility. If you hold chips by choice and can live with 40% drawdowns, the right amount may be the one you already own.

The point is to make the exposure a choice rather than an accident.

Sources and data notes

• Diversification Score on this site: correlation and independent bets from daily returns
• Sector Map on this site: the 12 sector groups used in the correlation chart
• Investing.com (November 5, 2026): the reported semiconductor index move
• Nvidia on this site: price, ratios and 10-year financials

Correlations and volatilities use 756 trading days of daily returns for stocks with three years of price history to October 30, 2026; the sample portfolios use the last three years of each pair. The scenario table is a linear estimate from the 0.20 beta and is not a forecast. Sample portfolios are equal-weight price returns without dividends and are not suggestions. This is educational content, not investment advice.

Chip exposure FAQ

Next step: put your own stocks into the Diversification Score, pick one per sector, and see how many independent bets you really hold.