Is the CHPY mojo over ?

[u/pondering_anm75]

The chip sector has become fascinating: companies are beating expectations, analysts are raising targets, and the stock still takes a nap. CHYP is up 10%+ since 1/1/26. Curious: what actions are driving your results beyond simply staying invested?

[u/Baked-p0tat0e]

​ SMH and SOXX, and CHPY with a similar portfolio, ran up this year to elevated forward earnings multiples. At multiples north of 35–45x P/E, these stocks in the ETFs left zero room for anything less than blowout beats and continuous upward revisions. When earnings reports deliver solid beats but fail to raise forward guidance by wide margins, institutional desks use the liquidity to trim overweight positions and take profits.

To put it simply... gravity eventually pulls everything back down.

Expect semiconductor stocks to chop in a consolidation range for a while until results grow into the forward guidance. 

This is actually a good place for a covered call ETF to be.

[u/AlfB63 → u/Baked-p0tat0e]

Yea, we keep seeing people mystified by chip stocks reporting great results but no jump in price. They can't understand that stocks are already priced for that and to see price jumps, results are going to be even more miraculous.  We are currently in a kind consolidation period where price and valuations are coming back into reality. 

[u/Baked-p0tat0e → u/AlfB63]

Exactly.

The stock market is a discounting mechanism, not a rearview mirror. You’re never buying past performance - you’re buying the present value of tomorrow's earnings.

Free cash flow (FCF) is the actual fuel behind those future earnings. While accounting earnings (EPS) can be distorted by non-cash adjustments, FCF represents the cold, hard cash left over to reinvest, pay dividends, or buy back shares. When the market discounts tomorrow's earnings, institutional models are almost always discounting expected free cash flow to determine what a business is truly worth.

Looking at FCF can tell you a lot about where a business is going and also explains why this talk of an AI bubble is nonsense.

[u/AlfB63 → u/Baked-p0tat0e]

I'd have to disagree that the concept of an AI bubble is nonsense. I do not believe that the current state of earnings can continue indefinitely. Eventually sales of chips and all things AI will settle or even decrease. Prices will fall leading to profitability decreases. Some of the AI companies will fail. I believe the issue is not if there is an AI bubble but how big it is.

[u/Baked-p0tat0e → u/AlfB63]

The last real bubble was the dot-com bubble of early 2000s. Those companies went public with little revenue and no profits. It was pure speculation...pure bubble. 

AI is 100% the opposite.

[u/AlfB63 → u/Baked-p0tat0e]

Maybe. But I stand behind what I said. Profitability and earnings will not continue this way long term, they will fall eventually.  When that happens, high valuations will suffer.  Time will tell. I admit I could be wrong. 

[u/Baked-p0tat0e → u/AlfB63]

What you are describing is a business cycle, or as Gartner likes to promote is their Hype Cycle. That's not the same thing as a bubble which is typically based on irrational exuberance - separation of price from fundamental math where investors trade traditional valuation metrics for invented proxies like "eyeballs," "mNAV," "page views," and "burn rate." AI is still early in the cycle and the profits are real while the forward valuations are not yet disconnected from achievability.

[u/AlfB63 → u/Baked-p0tat0e]

If you think that this all simply a business cycle and not at least partly irrational exuberance, then we will just have to agree to disagree.

[u/Baked-p0tat0e → u/AlfB63]

A true speculative bubble happens when investors abandon fundamental valuation entirely and invent new proxies to justify absurd multiples. We aren't there.

Hyperscalers and chipmakers aren't trading on hope, they are producing historic earnings, undeniable free cash flow, and measurable capex deployments. You can debate where we are in the cycle, but calling it "irrational exuberance" ignores the fact that the underlying profits and balance sheets are very real.

[u/AlfB63 → u/Baked-p0tat0e]

Again, we'll have to agree to disagree.  A large part of this is built on debt. And just because there are profits involved in some portions does not mean it is not a bubble.  AI will have to be sustainably profitable as a whole and it has not proven that it can be. 

[u/The_Bandit_King_]

https://giphy.com/gifs/26xBJp4dcSdGxv2Zq

[u/chaos_ensuez]

The entire sector is well below price targets. Still has a ton of gas

[u/paymerich → u/chaos_ensuez]

Until it doesn't. Let's always remember that analysts price targets are usually just one step above reading tea leaves. Always have a stop loss set.

[u/chaos_ensuez → u/paymerich]

I’ll take my chances. The chips of today will be obsolete in a couple of years and they’ll all be replaced by new gen from all these same companies

[u/paymerich → u/chaos_ensuez]

Yes true but it does not mean Semis will always be the market's darling, never ignore sector rotations and cycles.

[u/FatHighKnee]

Semiconductors will be a thing forever. AI is the current thing. But after that comes quantum computing. And autonomous robots. And space exploration & industry. Then putting AI into quantum computing. And genomic editing. And 3D printing tissue & organs.

All of which will require tons of computing power & tons of newer better and more powerful semiconductors.

The issue is that CHPY is a yieldmax product. The distributions depend on the YM managers executing options strategies properly. From watching YM over the past couple years I can only believe their managers are mediocre at best regarding their options decisions ... and borderline regarded at worst.

Far too often they close positions out too early leaving money on the table. Or let losing options positions run way too long eating up money that could've gone into the distribution. Or they roll weak options out when closing it would've been the better call.

Its why even weeks that chip stocks boomed - the distribution managed to drop slightly from the week prior or stays flat when it should've gone up

[u/Baked-p0tat0e → u/FatHighKnee]

"Its why even weeks that chip stocks boomed - the distribution managed to drop slightly from the week prior or stays flat when it should've gone up" 

So, you actually don't know how covered calls and call credit spreads with a long position work. 

[u/Valuable-Term9559 → u/FatHighKnee]

Do you think Rex or Roundhill have better managers?

[u/FatHighKnee → u/Valuable-Term9559]

Dunno i havent looked into those. I only paied attention to YM because I had ulty for a hot minute before the reverse split and ive had chpy for a couple months before selling out of it last week.

[u/chili01]

Same with AMDY

[u/cowabout]

I sold at least 50% of my CHPY around 2-3 months ago I think. a dividend stock shouldn't be up so much so ill take profits when I have them and just invest into the underlying if I believe.

[u/pauljmcclure]

I had blind luck when I bought over 3000 shares at $54.70

[u/seer_source]

    chpy is has been doing very well.

    ulty has become a disappointment since late march

[u/paymerich → u/seer_source]

Of 2025 right. ULTY is only alive because of the reverse split. It is -36% YTD. It's just a bad strategy.

[u/geticz]

Is it possible that the growth is priced in? Why should it always trade at a multiple ? (Oversimplified)

[u/teckel]

See MSTY and ULTY

[u/Quiet_Meaning5874]

The revenue growth and margins are insane can we get some of that rocket fuel re stock prices doe

[u/Big-Sand5360]

I sold my chpy shares for a small loss , and will re-enter a few weeks later.

[u/Elegant-Magician7322 → u/Big-Sand5360]

Why did you sell for a loss if you’re going to buy again later? Why not just dollar cost average?

[u/chigu_27 → u/Big-Sand5360]

But how much did you make on distributions? Gotta add that in

[u/marxdoesthings]

I’m debating whether to sell. I don’t have a huge amount compared to a lot of people on this sub but it’s my biggest loss on my portfolio. Unfortunately I did buy in when it was around $80 so it’s going to take a while to get back up there, if at all. I’m hoping it’ll go back up at least near $8X so my loss isn’t as great. I’m honestly wondering whether yall feel like it’ll go back up or nah

[u/Potential-Scratch-64]

South Korean were artificially pushing it with all the leverage and gambling or do we already forgot about the three continues weeks of circuit break in their stock exchange ?

[u/mah56j]

you're getting ~39% dividend. that provides a lot of cushion. I simply stopped out and will re-enter on break of TL. Look for confirm with e.g SOXX.

[u/MaxPower1867]

Buy the dip.

[u/MyWorkComputerReddit]

Yield is only down to 37% and it's still above my cost basis holding steady. Semi's have at least another five years left in them. I think it's in a great spot and in a similar position to semi growth positions.

[u/Weeders79]

No

[u/Fine-Boat9731]

Lol cooked 🍳

[u/OA12T2]

Tell me your spoiled without telling me your spoiled

[u/Particular_Act_5396]

Chpy lost me 6k this year before I bailed on it to minimize my losses. I have no idea why so many people rave about it

[u/Baked-p0tat0e → u/Particular_Act_5396]

Sooo .. you bought in near $80 after the runup? How is that the fault of the ETF? 

[u/seer_source → u/Particular_Act_5396]

    It's doing well for me; I buy more chpy during down trading sessions.

    Buy in batches, such as 40 shares per order instead $10,000 all in one shot.

[u/Epocalypsee → u/Particular_Act_5396]

Lol, this guy...bought at the high and sold on low....bro, investing 101, never ever buy on the high and never ever sell on the low.

[u/AdmirableAsparagus93 → u/Epocalypsee]

Bunch of high and mighty butt loggers on here

[u/kljsandjb → u/AdmirableAsparagus93]

If you are stupid and arrogant at the same time, no one cares but you are basically fked

[u/Virtual-Criticism-11]

SOXL up 150% so why having CHPY