Stocktwits co-founder looks past chips after dodging semiconductor selloff
Howard Lindzon cut more than half his semiconductor-index exposure before a 20% drop and now says AI investors should tread carefully.
By Sal Moretti · Money Reporter
3 min read
Howard Lindzon was out of much of his chip trade before the floor gave way.
The Stocktwits chief executive and co-founder sold more than half of his exposure to a semiconductor index about a month before the PHLX Semiconductor Index fell roughly 20%, according to MarketWatch. That drop put the index in bear-market territory.
Lindzon, who is also a partner at venture-capital firm Social Leverage, had warned on his blog that some chip names had run up 100% or more over a year. MarketWatch reported that he also pointed to concentration risk and what he described as leverage and speculative behavior among investors chasing the artificial-intelligence boom and companies racing to dominate it.
In a Monday interview with MarketWatch, Lindzon said the noise around AI chips had reached a loud point. “Everybody’s starting to talk like they’re experts in this space, and I think we just had a peak moment. But I’m not bearish,” he said.
He added: “I don’t think we were so much in a bubble as we were just in some kind of mania.”
Where he is looking now
Lindzon told MarketWatch he would probably buy back into chips after the selloff. He is also watching biotech and healthcare companies that may benefit from AI and the semiconductor buildout, including some genomic companies he said are breaking out. He also sees potential in some software stocks.
His broader message was caution, even as he views AI as a lasting technology theme.
Lindzon said most investors should be in index funds, which he said account for about 90% of what he does. His own method is direct indexing, using Frec.com, which he described to MarketWatch as one of Social Leverage’s major investments. That approach lets him adjust an index such as the S&P 500 to fit his preferences.
He said he used direct indexing to remove SpaceX from his investments. Lindzon criticized the company’s initial public offering as “silly and grifty” and said it came with hype around Elon Musk choosing the listing price, according to MarketWatch. MarketWatch reported that SpaceX has lost more than $1 trillion in market value since its post-IPO peak.
Apple, Google and the ‘degenerate economy’
Lindzon told MarketWatch he has owned chip investments for five or six years. He said Apple remains one of his AI-related holdings, along with Alphabet’s Google and chip stocks, because the iPhone and Android are how many people will use AI for now.
He also pointed to Robinhood, where he said he invested when the trading platform was valued at $8 million. MarketWatch reported Robinhood is now valued at $89 billion.
Robinhood is part of Lindzon’s Degenerate Economy Index, which he created in 2023 to track businesses tied to what he sees as a new phase of investing, ownership, gambling and phone-based finance. The index includes companies and assets such as Amazon, bitcoin, Google, Apple, Cboe Global Markets, CME and Hyperliquid Strategies, according to MarketWatch.
The index is up 178% since inception, MarketWatch reported.
Lindzon told MarketWatch that younger investors are using their phones to access trading, options and crypto because entry is easy and many are chasing large gains. “You won’t see Coke or Disney or Nike in my degenerate economy, but you see all the exchanges,” he said.
This story draws on original reporting from MarketWatch.