A J.P. Morgan strategist said that AI-related stocks are unlikely to be under pressure for a long time, and it is expected that strong profit growth and improved valuation will re-stimulate demand, especially semiconductor companies. The team, led by Mislav Matejka, stated in the report that semiconductor stocks have been disconnected from improving earnings prospects. The report said that substantial supply growth will not occur until 2028, so it is still too early to reflect the semiconductor price inflection point in the market. Fundamentals are likely to remain constructive, the report said. The relative strength index of these chip stocks is rapidly approaching the oversold region, and strategists say investors should “re-enter this sector in the summer” if capital expenditure expectations of hyperscale data center operators remain strong.

A J.P. Morgan strategist said that AI-related stocks are unlikely to be under pressure for a long time, and it is expected that strong profit growth and improved valuation will re-stimulate demand, especially semiconductor companies. The team, led by Mislav Matejka, stated in the report that semiconductor stocks have been disconnected from improving earnings prospects. The report said that substantial supply growth will not occur until 2028, so it is still too early to reflect the semiconductor price inflection point in the market. Fundamentals are likely to remain constructive, the report said. The relative strength index of these chip stocks is rapidly approaching the oversold region, and strategists say investors should “re-enter this sector in the summer” if capital expenditure expectations of hyperscale data center operators remain strong.