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Semiconductor stocks have slipped from their October highs as investors question whether the artificial-intelligence spending boom can keep delivering.
According to a market analysis published this week, doubts about the pace of AI revenue growth have cooled a rally that carried chipmakers to record valuations earlier this month.
Taiwan’s TSMC, the world’s largest contract chipmaker, reported September revenue of about 511.86 billion New Taiwan dollars, up 54.6 percent from a year earlier — a sign demand remains strong even as stock prices wobble.
The sector has also been stirred by reports of Elon Musk’s discussions around a chip venture dubbed Terafab, and by Nvidia’s announcement of a 150-billion-dollar share buyback.
For now, investors are weighing spectacular growth against sky-high expectations — a tension that is likely to define the sector into earnings season.
The pullback follows a blistering run in which AI enthusiasm lifted the entire supply chain, from foundries to memory makers to equipment suppliers. Valuations now assume years of uninterrupted growth, leaving little room for disappointment.
Bulls argue the spending is real: cloud giants continue to pour capital into data centers, and order books at leading chipmakers stretch well into next year. Bears counter that much of the investment is circular, with startups funded by the same giants buying their chips.
Third-quarter results, beginning in earnest this month, will offer the first hard test of which narrative is right. Until then, volatility is likely to remain the sector’s defining feature.
Memory-chip makers, often the most cyclical corner of the industry, are flashing mixed signals: prices have stabilized, but customers remain cautious about building inventory. Equipment suppliers, meanwhile, report that order push-outs have picked up.
For long-term investors, the question is whether the current wobble is a buying opportunity or the start of a deeper reset. The answer will likely come from corporate IT budgets — and from whether AI projects move from pilot programs to production.
