$SMH vs $HACK: Recent good correlation with breakout potential

Many market watchers will say that Semis are the most important stocks in the market. Semis are great from a market direction perspective. They are the best to indicate a downturn and the fastest to recover during a bull run. In this blog we have appreciated the relative resilience of the Cybersecurity stocks during the recent bear market. The cybersecurity ETF HACK fell only 25 % during the 2025 bear market. SMH fell almost 40% and SMH / HACK fell 35% which indicated the relative underperformance of Semis vs Cybersecurity in April. But form the lows of ‘Liberation Day’ SMH and HACK are trading with perfect correlation. But the question comes will SMH claim the leadership and outperform HACK if this bull market continues.

In the last 2024 Bull market SMH significantly outperformed the $HACK. We are probably in the early days of this breakout outperformance. So. In my opinion in the near term SMH outperforms $HACK. The ratio is at 96%. The ratio might touch the previous cycle highs of 160% if the momentum continues.

Verdict: SMH outperforms HACK in near term. Buy SMH ; Hold HACK