AI chip stocks show low P/E ratios amid investor doubt
Business
AI stocks like NVIDIA, Micron, Broadcom, and SanDisk (SNDK) are showing surprisingly low price-to-earnings ratios right now.
Sevens Report Research founder Tom Essaye thinks this is because investors aren't sure the current data center boom, fueling AI growth, will last.
If AI adoption slows down, companies could pull the plug on their big data center plans, which might mean a wave of order cancelations for chipmakers.
Tom Essaye warns of massive cancelations
Essaye compares today's situation to the dot-com crash in 2000, warning that if market hype doesn't turn into real growth, suppliers like NVIDIA and Micron could take a hit.
He says inflated expectations can backfire if demand doesn't keep up: "massive order cancelations" could follow.