From Seekingalpha · MarketGauge · · 50s
Bull Market Bargain Or Broken?
Semiconductors sector shifts from AI bull market optimism to overspending concerns.
In brief
Semiconductors sector shifts from AI bull market optimism to overspending concerns. Semiconductor companies face overspending and overhyped AI productivity gains in the current market correction. Originally reported by Seekingalpha.
Market Narrative Shift
Over the last two weeks, the market narrative behind the most influential sector in the AI-driven bull market has shifted significantly.
Semiconductor Overspending Concerns
The new narrative in the SMH sell-off is that companies are overspending, ROI expectations are overdone, and AI will disappoint on productivity gains.
Historical Context
The SMH selloff has been uncomfortable but is well within normal historical corrections since the 2009 lows.
Market Breadth Improving
Market breadth, as represented by the equal-weighted S&P 500, has been improving despite weakness in SMH.
What to remember
Semiconductor companies face overspending and overhyped AI productivity gains in the current market correction.
