JPMorgan strategists expect earnings growth to fuel chip stocks rebound
Strategists say AI-related stocks are unlikely to remain under pressure for long, anticipating strong earnings growth Improved valuations will re-stimulate demand, especially among semiconductor companies. Semiconductor stocks have become disconnected from improving earnings prospects, the team led by Mislav Matejka noted in a note. The report said that substantial supply growth will not occur until 2028, so it is too early to reflect the semiconductor price inflection point into the market. Fundamentals are likely to remain constructive, the report said. The relative strength index for these chip stocks is quickly approaching oversold territory, and strategists say investors should "reenter the sector over the summer" if capital spending expectations from hyperscale data center operators remain strong.