#chipstocksreboundliftingusshares Chip stocks got hammered for a while and have finally bounced back a bit. But the next test is already here..
Meta and Tesla report Q3 earnings this week. Google, Microsoft, Amazon and Apple follow next week.
Why do chip stocks care? Because big tech is their biggest customer. These companies spend tens of billions a year on chips and data centers for AI. If they keep spending, chips hold up. If they start cutting back, chips could fall right back down.
The problem is that the market is starting to question whether all that spending pays off. Tesla's revenue was up 26% last quarter, but profit missed by a mile because so much went into AI and robots.
LNW CIO Ron Albahary put it bluntly: AI winners now have to show real profits that justify their stock prices.
He doesn't think this is a dot-com-style bubble where prices just got too high. The bubble may be in profit expectations instead. So even growing profits can send a stock lower if they fall short of what people were hoping for.
Meta and Tesla report Q3 earnings this week. Google, Microsoft, Amazon and Apple follow next week.
Why do chip stocks care? Because big tech is their biggest customer. These companies spend tens of billions a year on chips and data centers for AI. If they keep spending, chips hold up. If they start cutting back, chips could fall right back down.
The problem is that the market is starting to question whether all that spending pays off. Tesla's revenue was up 26% last quarter, but profit missed by a mile because so much went into AI and robots.
LNW CIO Ron Albahary put it bluntly: AI winners now have to show real profits that justify their stock prices.
He doesn't think this is a dot-com-style bubble where prices just got too high. The bubble may be in profit expectations instead. So even growing profits can send a stock lower if they fall short of what people were hoping for.