So far in the third quarter, semiconductors have underperformed the Nasdaq-100 by 12.3 percentage points, and they may be set for the largest quarterly lag since Q3 2002. Last quarter, they had just posted a record +67.4 percentage points of excess return. But within the year they are still up 88% versus the Nasdaq-100’s 21%. The leaders and the pause/rest are the same group of stocks; a single-quarter lag doesn’t mean the story is over—it often just reflects that the sector ran too fast and the break tends to last longer than people expect.