Morgan Stanley's Lisa Shalett warns investors on semiconductor stocks
Morgan Stanley's Lisa Shalett is urging investors to be careful with semiconductor stocks.
She points out that as AI spending shifts, big tech companies are choosing cheaper, in-house chips for their data centers, leaving traditional chipmakers with less pricing power and possibly lower profits.
Lisa Shalett calls chip stocks overbought
Shalett calls these stocks "meaningfully overbought," noting the Philadelphia Semiconductor Index's price-to-earnings ratio has more than tripled since 2022.
She also mentions how SK Hynix shares have dropped sharply in its home market, tumbling 26% since peaking last month, as the company begins trading on the Nasdaq, showing just how volatile things can get.
Plus, with leaders like Meta's Mark Zuckerberg now focused on making AI infrastructure pay off, there could be even more pressure on chipmakers as tech giants rethink their spending.