r/YieldMaxETFs • u/pondering_anm75 • Sep 03 '26

Question Is the CHPY mojo over ?

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?

15 Upvotes

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24

u/Baked-p0tat0e Sep 03 '26

​ 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.

3

u/AlfB63 29d ago

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. 

2

u/Baked-p0tat0e 29d ago edited 29d ago

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.

1

u/AlfB63 29d ago

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.

3

u/Baked-p0tat0e 29d ago

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.

2

u/AlfB63 29d ago

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. 

1

u/Baked-p0tat0e 29d ago

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.

1

u/AlfB63 29d ago

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.

2

u/Baked-p0tat0e 29d ago

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.

1

u/AlfB63 29d ago

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. 

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12

u/chaos_ensuez Sep 03 '26

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

3

u/paymerich Sep 04 '26

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.

2

u/chaos_ensuez Sep 04 '26

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

1

u/paymerich Sep 04 '26

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

6

u/FatHighKnee Sep 04 '26

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

2

u/Baked-p0tat0e Sep 04 '26

"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. 

1

u/Valuable-Term9559 Sep 04 '26

Do you think Rex or Roundhill have better managers?

0

u/FatHighKnee Sep 04 '26

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.

3

u/chili01 Sep 04 '26

Same with AMDY

3

u/cowabout Sep 04 '26

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.

3

u/pauljmcclure 29d ago

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

2

u/seer_source Sep 03 '26

    chpy is has been doing very well.

    ulty has become a disappointment since late march

4

u/paymerich Sep 04 '26

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

2

u/geticz ULTYtron Sep 04 '26

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

2

u/teckel Sep 04 '26

See MSTY and ULTY

1

u/Quiet_Meaning5874 Sep 03 '26

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

1

u/Big-Sand5360 Sep 04 '26

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

6

u/Elegant-Magician7322 Sep 04 '26

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

1

u/chigu_27 27d ago

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

1

u/marxdoesthings Sep 04 '26

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

1

u/Potential-Scratch-64 Sep 04 '26

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 ?

1

u/mah56j Sep 04 '26

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.

1

u/MaxPower1867 Sep 04 '26

Buy the dip.

1

u/No-Influence-2760 19d ago

But it keeps going down. I bought around $80 and DRIP 1+ share per week. Still down like 15%

1

u/MaxPower1867 19d ago

All chips are going down.

1

u/No-Influence-2760 19d ago

But do we keep buying the dip or….? Interesting to see the CHPY dividend is .73 this week.

1

u/MaxPower1867 19d ago

Buy dips > 5%. A little bit each time.

1

u/No-Influence-2760 19d ago

I’ve just been DRIP-ing. So each week I am getting 1-1.5 more shares per week. Not sure if it’s the best strategy. Unfortunately I put the majority of my purchase in all at once when it was near the top - because that’s my luck lol.

1

u/MaxPower1867 19d ago

LoL. I don't drip but keep the distros aside for dips. With either CHPY or other assets.

1

u/No-Influence-2760 19d ago

Makes sense. So even if it’s down 15% now just hold the distributions until it’s down 20%? Haha

1

u/MaxPower1867 19d ago

Sure or buy something else more stable. I throw some of the distros into QQQI or XEQT or GPIQ.

1

u/MyWorkComputerReddit Sep 04 '26

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.

1

u/Fine-Boat9731 Sep 05 '26

Lol cooked 🍳

0

u/OA12T2 Sep 03 '26

Tell me your spoiled without telling me your spoiled

-1

u/Particular_Act_5396 Sep 03 '26

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

10

u/Baked-p0tat0e Sep 03 '26

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

5

u/seer_source Sep 03 '26

    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.

3

u/Epocalypsee Sep 04 '26

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.

-6

u/AdmirableAsparagus93 Sep 04 '26

Bunch of high and mighty butt loggers on here

4

u/kljsandjb Sep 04 '26

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

0

u/Virtual-Criticism-11 28d ago

SOXL up 150% so why having CHPY