Investor enthusiasm for AI chipmakers wanes as growth outlook dims
The hype around artificial intelligence (AI) chipmakers is cooling off, with investors starting to question how much longer the growth can last.
These companies saw huge gains recently, thanks to big spending from Microsoft, Amazon, Alphabet, and Meta on AI data centers.
But according to UBS, that spending is expected to slow down sharply over the next few years, so the wild growth may not stick around.
Semiconductor stocks remain strong despite rotation
Fund managers are now moving their money toward industries that benefit from AI, like cloud giants and cybersecurity firms, while cutting back on chipmaker stocks.
Even so, semiconductor stocks are still holding strong: the Philadelphia Semiconductor Index has more than doubled in the past year.
A Bank of America survey even called semiconductors "the most crowded trade in global markets," showing just how popular these stocks remain despite changing outlooks.