JP Morgan issued a bullish call on semiconductor stocks on the 20th (local time), stating the sector will form a bottom soon despite recent sharp declines, as AI-related company earnings and industry conditions remain robust. Strategist Mislav Matejka explained that meaningful supply expansion is not scheduled before 2028, making it premature to reflect an industry turning point now, but if hyperscalers maintain strong capital expenditure guidance, investors should buy semiconductor stocks again this summer. The assessment comes as export restrictions, tariffs, geopolitical tensions, and concerns about cooling AI investment have pressured semiconductor sector sentiment, with the iShares Semiconductor ETF (SOXX) down approximately 13% over the recent month.
Semiconductor Stocks Face Sharp Market Cap Decline Amid Sector Correction
The iShares Semiconductor ETF (SOXX), a representative semiconductor exchange-traded fund, declined approximately 13% over the recent month according to Yahoo Finance. Memory semiconductor stocks, which showed the strongest performance this year, experienced significant corrections. Micron's market capitalization decreased by approximately $350 billion from its peak, while SanDisk, Intel, Applied Materials, and Lam Research each saw market cap reductions exceeding $100 billion. Concerns about cooling AI investment intensified after China's Moonshot AI unveiled Kimi3, a low-cost AI model, raising questions about whether US Big Tech companies' AI investment scale is excessive.
JP Morgan Cites Strong Earnings and Supply Constraints as Bottom Catalysts
JP Morgan strategist Mislav Matejka stated that semiconductor stocks will form a bottom soon based on strong earnings. He explained that meaningful supply expansion is not scheduled before 2028, making it too early to reflect an industry turning point now, but if hyperscalers' capital expenditure guidance continues to remain strong, investors should buy semiconductor stocks again this summer. JP Morgan is among the major securities firms that preemptively issued optimistic forecasts following the recent semiconductor stock decline.
Long-Term Investors View Correction as Buying Opportunity
Nancy Tengler, CEO of Laffer Tengler Investment, assessed the correction as an opportunity for long-term investors. She stated she does not view the memory semiconductor stock decline seriously, adding that if stock prices decline further, she will actively engage in buying if she believes in long-term growth potential.
FAQ
What did JP Morgan say about semiconductor stocks on the 20th (local time)?
JP Morgan strategist Mislav Matejka stated that semiconductor stocks will form a bottom soon based on strong earnings, and if hyperscalers maintain strong capital expenditure guidance, investors should buy semiconductor stocks again this summer.
Why did the iShares Semiconductor ETF (SOXX) decline approximately 13% over the recent month?
Export restrictions, tariffs, geopolitical tensions, and concerns about cooling AI investment pressured semiconductor sector sentiment. China's Moonshot AI unveiling the low-cost AI model Kimi3 also raised questions about excessive US Big Tech AI investment scale.
How much market capitalization did major semiconductor companies lose during the recent correction?
Micron's market capitalization decreased by approximately $350 billion from its peak, while SanDisk, Intel, Applied Materials, and Lam Research each saw market cap reductions exceeding $100 billion.
